Golder talks sustainability strategy: How to start and stay successful
Sean Capstick, Principal at Golder, shares insights into developing ESG strategy that fits your business – and keeping focus for ultimate success.
It’s safe to say that global interest in ESG strategy is surging like never before. And with Environmental, Social, and Governance ratings becoming an increasingly important indicator for investors, businesses feel more and more pressure to get it right. Yet countless reporting frameworks and unclear standards also leave them feeling unsure of how to start. We spoke with Sean Capstick, Principal with Golder, an Enhesa service partner and member of WSP, for his insights into how to get ESG rolling in your company – and how to get it right.
With firsthand experience in supporting both clients and his own company’s ESG efforts, Sean offers an insider perspective on best practices. He currently leads the firm’s Sustainable Development and Climate Change Technical Community. He suggests that finishing strong in ESG starts with transparency and focusing first on what your company does well.
What’s the biggest struggle with ESG strategy and its obscurity?
With the attention that these issues receive, I think leaders within businesses and organizations are concerned about missing out on some new process. They think this could mean they’ve been overlooking requirements or will need to run their business in a very different way.
Secondly, ESG has been taken by shareholders as a proxy for both fiscal and risk management. Companies that can better tell their ESG story and share their ESG strategy are rewarded by better access to capital via increased share prices or sustainability-backed loans. This shift in the market rewards companies who can clearly establish and communicate their strategy and associated acts as a significant incentive for those goals. But many don’t know where to start.
When developing an ESG strategy, where should companies start?
To help clients, we often start with a gap analysis or a bottom-up assessment of their data collection, management, and stakeholder engagement process. This benchmarking not only allows companies to identify where they can improve but also focus on what they are doing well and what is important.
Usually, we find that companies have been doing a good job in the past but need to focus on transparency and strategy moving forward. Under the ESG framework, stakeholders are asking “Show me that the data is credible and tell me what are KPIs and targets for the things that matter most.” Companies already have these programs for areas like HSSE (Health, Safety, Security & Environment) that includes community safety and workers’ health. Sometimes it’s as simple as matching what they’re already doing with stakeholders’ questions.
How can businesses pare down the plethora of criteria into an ESG strategy?
Completing a materiality assessment is a good way for companies to focus on the issues that differentiate them and develop a plan that increases and highlights this differentiation. Our approach is to focus on two significant opportunities that clients can take advantage of: 1) The ability for a client to signal their strategy and 2) The focus the markets are putting on these issues.
Initially we get clients focused on what they do well and what matters to them. Then, the target ESG framework can really help document how the company plans to improve and grow. This could be enhanced reclamation for a mining company, improving the safe work environment at a refinery, or increasing tenant comfort and satisfaction for a property manager.
What tips can you share with companies who aim for an ambitious ESG strategy?
First, transparency. I’m pleased to work for a company that is “walking the talk” as we help our clients meet their targets. When you look at WSP’s plan for net-zero emissions by 2040, you’ll see that it’s very transparent. It’s has been informed by a very detailed assessment of our emissions, both under our control and through our supply chain. Having this granular information on the emissions sources, we were able to make detailed plans following the Science Based Target Initiative to address site-specific issues across our operations.
Also, to remember that ESG strategy is a journey – not a one-and-done exercise. It must become part of an organization’s operating practices, not a quarterly or annual deliverable. Much like the health and safety culture is now part of every company’s mission and vision, sustainability will become part of how the company does business. Having a clear mandate from our CEO keeps this a priority. We treat this work the same as any other client project with a detailed project management plan and dedicated project manager. By developing this plan, we’ll be able to track progress, celebrate successes, and update the plan as new challenges arise.
The right start for the best ESG strategy – and a better world
A good ESG strategy is not only good for funding – it plays into building a better future. A cleaner, safer world for future generations should be everyone’s business. But navigating the swirling ocean of voluntary standards and recommendations can be daunting – no matter the merit. Having a strong corporate ESG game plan is critical. If your company feels stuck finding its way forward, take a first step by analyzing where you are. Much of what you’re already doing to protect your workers and our world for EHS regulatory compliance can give you a leg-up to leverage for ESG. From there, focus on what you find to be the most important ESG criteria for your business, remembering to keep it transparent and a top priority along the way.