ESG budgets and spending should be focused on creating value. Period.
Stop ESG & Sustainability Spending
Stop spending on ESG until you fully understand the value you plan to receive back from your ESG, SDG and Sustainability engagement. Learn your ESG value-propositions
Your spending should be value-driven. Value for your business, value for society and value for environment and ecosystems. Lose this focus and lose value and money. There is no shortcut.
ESG & Sustainability Spending Deserve the Same Scrutiny as Capital and Operating Budgets
Don’t give them a free ride! You wouldn’t spend in other areas of your business without an understanding of the payback or how you expect to create shareholder value. ESG and Sustainability spending and budgets deserve the same payback and shareholder return scrutiny as any other type of investment.
This isn’t to take anything away from the critical importance of delivering social value, ecosystem support and environmental stewardship. It is to point out that meaningful and sustainable corporate impact on ESG and Sustainability should produce business value along with social impact and environmental stewardship.
Anything less is much more about charity and philanthropy and will undoubtedly face budget pressures when the inevitable cash crunches happen.
Do Your ESG & Sustainability Value Proposition Analysis
Your starting point for smarter ESG spending is to understand your ESG value propositions.
- How can your ESG related budgets create value for your business? Be specific and include looking at how it can creative value for different areas of your business.
- How can your ESG related budgets create meaningful social value for key stakeholders and stakeholder interests?
- How can your ESG related budgets enhance ecosystems and support environmental goals?
- Where do these value propositions align? Where can you simultaneously create business value, social value and support the environment?
- What can you do that would allow the above to create even more value? (hint, the answer often lies in strategic and pragmatic ESG communications and reporting)
An ESG SWOT Can Unlock Value and Identify Risk
A structured and systematic ESG SWOT analysis, where you strategically identify and examine your ESG Strengths, Weaknesses, Opportunities and Threats, can help you unlock value and identify risk.
If you want to learn more about an ESG SWOT check out this blog Do you understand your ESG Strengths, Weaknesses, Opportunities and Threats?
Or click here and request a follow-up call.
ESG Spending must create value
ESG performance can be a powerful value creator for your business and your career. To capture that value requires focus and the pragmatic, strategic application of simple principles.
Your ESG spending must be focused on value creation. Value creation for your business and for your stakeholders, society and the environment you operate in.
If you found this article interesting you may also enjoy some of these.
What Is Environmental, Social, and Governance (ESG)?
ESG Reporting: What Is It And Why Is It Important?
ESG vs CSR vs Sustainability: How Do They Compare?
ESG Rightsizing: Using the ESG & SDG Framework Throughout The Organization
If you would like to speak to the Institute directly about how we may help, please email us.
ESG, Sustainability & CSR should be as much a business value driver as it is a social and environmental value driver. If it gets out of balance it creates risk and makes the CSR and indeed, even the business itself, potentially less sustainable.
Business is about creating value. CSR is also about creating value; value for society, for
environment and for shareholders.
Thanks for reading
Wayne Dunn
Founder and President
