Examining the three pillars of sustainability

As legislation such as the Corporate Sustainability Reporting Directive (CSRD) shine the spotlight on businesses’ actions regarding sustainability, it’s becoming all the more important to have the right information recorded and readily available. This may seem a daunting task, but fortunately there’s a distinct link between EHS metrics and corporate sustainability reporting. In preparing for sustainability reporting, companies can leverage a significant amount of pre-established reporting. The trick is to identify what’s already being recorded and what additional information will be required come the end of 2024.

To give you an idea of how your EHS compliance metrics can contribute significantly to sustainability and ESG reporting, here’s a simplified view of the topics that fall under each of the three pillars of ESG (environmental, social, and governance).

Pillar 1: Environmental

The environmental pillar tends to get the most attention – from organizations, governing bodies, and the public alike. This shouldn’t come as much of a surprise. The importance of minimizing and mitigating society’s impact on the environment is ubiquitously agreed upon across the world.

So, let’s look at some of the specifics that fall under the environmental pillar of sustainability reporting.

As you can see, the coverage is comprehensive. From air and greenhouse gas (GHG) emissions to water and waste management – the environmental pillar concerns itself with a wide range of sustainability topics. But this list also crosses over significantly with the EHS metrics already accumulated by most global corporations. 

Integrating this data into supporting an ESG reporting program enables strategic development, internal sustainability reporting, and transparent disclosures based on compliance information that, in most cases, is already captured by companies.

As you can see, the coverage is comprehensive. From air and greenhouse gas (GHG) emissions to water and waste management – the environmental pillar concerns itself with a wide range of sustainability topics. But this list also crosses over significantly with the EHS metrics already accumulated by most global corporations. 

Integrating this data into supporting an ESG reporting program enables strategic development, internal sustainability reporting, and transparent disclosures based on compliance information that, in most cases, is already captured by companies. 

Pillar 2: Social

As one may guess, the social pillar largely focuses on the impact a company has on people – whether it be employees, customers, stakeholders, supply chain workers, or those peripheral to operations, such as local communities near facilities. This makes the social pillar an expansive aspect of sustainability reporting. 

Here’s a view of some of the major categories that also cross over from EHS metrics.

What makes the social pillar distinctly challenging is that it’s uniquely particular to each organization. This poses challenges in setting universal reporting standards. If every business has different activities – and therefore impacts – how can standardized reporting requirements be determined? 

The answer: With great difficulty and complexity. 

Not only can social issues be more challenging to measure and quantify than environmental concerns, but the collection of information suffers from limited standardization. Furthermore, there’s considerable variation even within these categories, which means robust regulatory frameworks exist for many areas under the social pillar. 

This makes it even more imperative to have a thorough understanding of the diverse areas covered by the social pillar, and which apply to your specific operations. 

Pillar 3: Corporate governance

The corporate governance pillar looks at the organizational approach to governance, risk management, and compliance practices. In most organizations, corporate governance is generally one of the more clearly defined, mature, regulated, and monitored aspects of business.

Areas such as tax, corporate misconduct, and supplier protection have solid regulatory processes in place already. There are still some new topics being regulated, though – for example: whistleblowing protection, board diversity, and climate initiative oversight roles.

As with each of the ESG pillars, EHS compliance can form the unshaking ground upon which corporate governance sustainability reporting can be built. 

Ensuring visibility of EHS compliance across all operations and all jurisdictions is a basic first step in any governance program. Also like the social pillar, interpretations may vary across organizations, but Governance and Risk Compliance (GRC) commonly encompasses activities such as corporate governance, enterprise risk management (ERM), and adherence to relevant laws and regulations. 

Make the compliance connection

It’s evident that the crossover between corporate sustainability requirements and EHS metrics is profound. Many companies are already making the connection between EHS metrics and corporate or sustainability reporting and are using their EHS metrics effectively.