Align senior stakeholders on climate priorities
Setting and balancing climate priorities is the biggest sticking point for corporate ESG strategies. In LEK Consulting’s research, 58% of executives said there are “significant differences in opinion within the leadership team” on how to balance short-term business priorities with long-term ESG goals.
In situations such as this, individual executives may be tempted to make decisions that serve their own short-term interests at the expense of the planet’s long-term habitability. Together, these individuals will inevitably undermine a company’s climate-related ambitions.
Overcoming this challenge hinges on achieving a consensus on climate priorities and codifying them in a documented climate action framework. This will provide for accountability and should help to define who is responsible for the specific goals and initiatives it defines.
The complexity of this task may be why so many struggle with it. At Momentum ITSMA, we broke things down into a collection of achievable steps to arrive at our finished framework. These included:
• Agreeing a bold sustainability “mission statement” and securing executive buy-in for this climate vision
• Appointing an ESG team consisting of Momentum ITSMA employees who are passionate about this cause
• Publishing defined climate pledges for each fiscal year and providing transparency into our performance against past pledges
• Empowering our ESG team to deliver the specific initiatives required to achieve our published climate commitments
Establish measurable climate impact KPIs
ESG reporting is increasingly necessary for regulatory compliance, as well as for tracking voluntary climate goals. Yet, just 27% of respondents in LEK Consulting’s survey said they have any enterprise-wide KPIs for ESG. Just 3% reporting having a full set in place.
At Momentum ITSMA, we have drawn inspiration from industry leaders such as VMware to address this challenge. In its Environment, Social and Governance Report 2023, the technology giant outlines how it calculates its Scope 1, 2 and 3 emissions to facilitate its net-zero transition.
Using 2022 as our initial benchmarking year, we did the same for our carbon emissions, alongside our regular gender pay gap reporting and staff engagement surveys. Our analysis included factors such as the total kilowatt hours used to heat/cool company facilities, total kilowatt use in company facilities, and other energy use metrics. Having gathered this data, we applied officially recognised “conversion factors” to it to calculate a greenhouse gas emissions estimate.
This benchmarking exercise was essential for tracking our company’s progress and providing transparency into the results our strategy is generating. As such, we strongly recommend ensuring your business does the same – or hiring an independent consultant to make these calculations for you.
Promote and embed cultural change
Technological innovation or adaptation must play a role in enabling companies to adopt more sustainable practices. But driving behaviour change is just as vital.
LEK Consulting’s research shows that few organisations have the right culture in place to achieve their stated climate goals. When asked where their companies are least prepared to deliver their ESG goals, 43% of respondents cited reward and incentive frameworks and 40% cited their organisations’ culture.
To address these hurdles at Momentum ITSMA, we’re making continuous efforts to ensure that the change is seen in every aspect of the organization. This includes actively implementing rewards and incentives intended to promote and embed more sustainable practices across our workforce.
For example, our Open Horizons initiative empowers staff to undertake charitable projects by providing up to five staff members per year with bonus holiday days and up to £5,000 each to support their volunteering opportunities.
We also actively encourage our clients to consider sustainability as part of their enterprise growth strategies and are integrating ESG into our work socials and showing how we can all do more to help our society. This will help give the change we’re aiming for a solid place in our organizational culture.
Cultural change is a journey and we still have a way to go. But we have found that installing a passionate and empowered ESG team is a good first step.
Keeping a company on track to meet its climate goals is a continuous effort that must be constantly integrated into the working culture in different ways.
Using the steps explored in this article, Momentum ITSMA has taken a positive first step on this journey, implementing an ESG strategy with clearly defined climate goals. As a result of them, we have fulfilled 90% of the climate promises we made to our stakeholders in FY2023.
Of course, there’s room for improvement, and we will strive to further enhance our strategy in the months ahead. We hope the steps summarised here provide the inspiration and impetus for you to do the same in your organisation.