The momentum behind Environmental, Social and Corporate Governance (ESG) themed investing has reached an all time high. Investors, and those seeking meaningful employment have recognised that money is not the sole factor in a company’s business continuity. When we form relations with a company, having an accurate and encompassing measure of the sustainability of our investment can make all the difference. At the heart of ESG investing is the simple idea that companies are more likely to succeed and deliver strong returns if they create value for all their stakeholders including employees, customers, suppliers, and the wider society such as the environment, and not just the company owners. ESG analysis considers how companies serve society and how this impacts their current and future performance, rather than simply about what the company is doing today.
This new understanding has created a market for a data driven, quantitative evaluation of a company’s operation and values. Many pioneering companies have already taken up the challenge. A highly established solution to this dilemma comes in the form of a holistic sustainability rating service, called EcoVadis. It operates an evidence-based online platform, providing supplier sustainability ratings and allowing companies to assess the ESG performance of their global suppliers. It considers a range of CSR issues, which are grouped into four themes: ‘Environment’, ‘Labour & Human Rights’, ‘Ethics’, and ‘Sustainable Procurement’. Upon registration, EcoVadis has questionnaires tailored to >200 specific sectors, and companies ranging from as small as 25 employees to 1000+. This means every questionnaire is different depending on the company, and to make it worse, you are only given 3 weeks to complete it.
Even large companies with fully equipped teams can struggle to produce all the evidence in time to achieve a rating, let alone a ‘gold’ rating, the highest rating EcoVadis provides. This is where we come in. Risk Evolves is all about using our experience and refined resources to support you. We offer ad hoc, retained and emergency support services for companies.
One example of our work is with a local creative agency that wanted to show their clients how important ESG is to them and sought to achieve this through acquiring an EcoVadis rating. With only two weeks to achieve their rating, we worked together to compile all the evidence in order to complete the extensive questionnaire. As well as supporting our client in achieving the best possible rating, another goal was to make sure they understood the EcoVadis process, so that they are equipped and prepared to support themselves in their next review. Additionally, because we found that the policies, certificates, and documents EcoVadis sought were truly representatives of leading ESG values and methodologies, we made sure to diligently integrate these newly formed policies and commitments into the core of their company values. We guided our client through their amended policies and provided training on GDPR and environmental awareness to cement these values and learnings into the company. Another one of our goals was to give our client the tools to continue to monitor their environmental impact. The Questionnaire required companies to measure this impact and outline solutions to minimise this. After thorough evaluation of the company to determine their greenhouse gas emissions, we developed various strategies to help them mitigate their environmental impact, such as carbon offsetting. We then produced a unique emissions tracker spreadsheet that could be used continually to update and track emissions against reduction strategies, helping our client to go beyond the scope of what EcoVadis required.
We faced many challenges throughout this project. Although we were successful in completing the questionnaire before the deadline, understanding the platform and what was required of us took a significant amount of time. As we are now more experienced with EcoVadis we can communicate what is needed from our clients more clearly and efficiently, leaving us more time to build a better case. As our name suggests, Risk Evolves is always growing and looking to provide value in areas that resonate with our principles. We have started our journey into the world of ESG to help companies show their commitment to the environment and to each other’s well-being.
Author: Dr Munebah Kara, Risk, Compliance and Environmental Consultant & Sean Johnson, Environmental & Sustainability Specialist – Risk Evolves
Risk Evolves – Making compliance simple, every day. Our specialists enable businesses to reduce risk and maximise opportunities in six key areas: Risk Management – GDPR – ISO Certifications – Cyber Security – Health & Safety – Environment & Sustainability. If you’d like to know more about how Risk Evolves can help you prepare to meet the challenges and risks inherent in twenty-first century business, please get in touch for a free no-obligation consultation.
