This post originally appeared in UNLEASH on September 25, 2023.
Environmental, Social, and Governance (ESG) initiatives have surged to the forefront of corporate agendas, driven by the imperative for sustainable practices.
However, the challenge lies not in identifying purposeful ESG goals, but rather in executing the ESG strategy effectively.
“We don’t have a problem with purpose; we have a problem with execution,” notes Ragne Maasel, Group Head of ESG at LHV, an Estonian-headquartered bank.
“The fundamental misconception with ESG is that it is an ideological issue; that it is about doing good.”
Kwasi Mitchell, chief purpose and DEI officer at Deloitte, agrees: “What I think is problematic is that we’ve become engaged in this dialogue around ESG that has become politicized.”
The balance between purpose and pragmatism
The importance of purpose and impact cannot be understated when discussing ESG; however, Maasel cautioned that solely focusing on purpose won’t induce change in business processes.
“If you want to change processes, talking about ideology and purpose is not going to be successful when I want key leaders to change the way in which they make business decisions.”
Kieren Mayers, Senior Director of ESG at Sony Interactive Entertainment, echoes that a focus on process is key.
He notes: “It’s important to focus on changing processes and practices and hearts and minds to actually have tangible change; to turn your intentions into action and not necessarily listen to the mainstream opinion of what ESG should do.”
Indeed, companies that stay in the land of lofty purpose statements but fail to take real steps toward change risk becoming obsolete.
“If companies don’t make the shift into actually being more sustainable, then they won’t survive,” says LHV’s Maasel.
Setting your ESG policy
“ESG itself is very complex and challenging. And then each company is unique, so there’s not a ‘one-size-fits-all’ approach. But we need to make sure we’re doing the right things, and doing them well,” adds Sony Interactive Entertainment’s Mayers.
Deloitte looks at the question of what to focus on in a similar way to Sony Interactive Entertainment.
“It’s about shared values,” states Mitchell. “It’s important to focus on where you can have a material impact on society.”
Therefore, Deloitte asks themselves what they are good at and what they can distinctly offer.
One place where Deloitte excels in this is in their hiring practices.
“We look at how we can open up pathways for people to enter into a professional services career that historically wouldn’t have been able to do so.