Integrating sustainability into decision-making

In this short series of insights, we’ve highlighted the growing importance of Sustainability and ESG (Environmental Social Governance) reporting, the regulations that are driving this, and the benefits in SMEs responding positively to it. 

To recap, the need for information is being driven by governments, investors, providers of capital, and other stakeholders who are demanding to know how an organisation’s plans to address the transition to a low-carbon economy and a more sustainable society are being reflected in their financial statements. 

Highlighted below are some tips on how to integrate sustainability and ESG reporting into the business decision-making process. 

Identify who the stakeholders are. It is good practice to conduct a stakeholder mapping exercise to understand the different material needs of each group. This information can help drive your ESG strategy, as well as help inform your risk and opportunities assessment. 

Complete a data audit. Gathering reliable data is essential to meeting reporting requirements. The goal of the regulatory and standards bodies is to raise the quality of non-financial data to be on a level with financial data. Establishing where the data exists, who owns it, and how to efficiently collate can be a huge challenge for most businesses. 

Focus on material issues. Whilst good data is important, too much information can be misleading and confusing, so focus on the material ESG issues impacting on your business and those ESG areas that the business has an impact on. This will also reduce the data-gathering task. 

Encourage cross-department buy-in. It pays to engage the right people across the business, to establish ownership and accountability, and to upskill staff where necessary. Businesses that take a collaborative approach will make the most progress. 

Add value through transparent reporting. Stakeholder demands for transparent reporting have never been higher. Whilst there is no set standard for ESG reporting, by integrating ESG data into the decision-making process, businesses can add considerable value to their reputation, brand, and investment attractiveness. Consider collating information into a publicly available Impact Report. A copy of our most recent Impact Report can be downloaded here.  

Avoid greenwashing. Much of the ESG legislation is focused on the environment, so understanding your carbon footprint across Scopes 1, 2, and 3 of the greenhouse gases classification is important. Identify areas of highest impact and set stretching but realistic targets around the issues that are material to the business. (NOTE: Scope 1: direct emissions e.g. owned vehicles fuel, gas boiler, and air-conditioning; Scope 2: indirect emissions e.g. purchased electricity; Scope 3: other indirect supply chain emissions). 

Be Genuine. Stakeholders value genuine commitment. It is okay not to have all the answers, and by setting realistic targets and being open about progress, you can demonstrate continuous improvement and establish a proactive culture. 

If you are interested in understanding more about sustainability and ESG, contact Fleur Lewis, partner and responsible business lead, or visit our Responsible Business Hub to discover our latest Bishop Fleming Impact Report. 

In our last insight in this series, we share a summary of Bishop Fleming’s ESG journey, or ‘Responsible Business’ as we refer to it.