Why ESG? Why Now?
ESG Overview
Let’s start with a basic description of what ESG is all about.
ESG is an acronym standing for “Environmental, Social, Governance,” and was originally coined by the finance industry as a way to describe the non-financial or “pre-financial” risks they were assessing. Despite the association between ESG and climate change, there is a wide range of ESG issues that are used to evaluate a company’s overall strength and health, including:
- Environmental – Air pollution; Greenhouse gas emissions; Energy; Water; Waste and Biodiversity.
- Social – Employee relations and development; Diversity and inclusion; Occupational health and safety; Community relations; Human rights; Privacy; and Data Security.
- Governance – Board oversight; Board diversity; Risk management; Shareholder rights; and Anti-corruption.
An effective ESG program will connect sustainability to business strategy and results, as well as to positive social, environmental, and economic impact. [1] A successful ESG strategy enhances business and creates value for the company.
Just as financial reporting is not an end goal for a company, but is a communication of the financial results of its various activities, ESG strategy and disclosure communicates how the company is managing environmental, social and governance issues.
Our June 2023 ESG Workshop provided an overview of the history of environmental reporting (download slide deck):
Let’s take a look at some of the reasons more companies are tackling or considering incorporating ESG in their business strategy:
Value Creation & Risk Reduction
Developing an ESG program establishes a process for understanding a company’s impacts, risks and opportunities. This facilitates a process for continuous improvement, business innovation, and creating a competitive advantage – including growth opportunities. There is growing evidence that companies that measure their operational impacts and effectively manage material ESG risks and opportunities are more resilient during times of volatility and uncertainty, and they financially outperform their peers over the long run. [2] Instead of thinking about ESG as an expense, think about it as a way to stimulate new business ideas and to create new value for a company.
The risk of ignoring ESG issues is growing at the same time that the value creation and business opportunities associated with ESG are increasing. Additionally, private equity and institutional investors are incorporating relevant ESG issues into their investment decisions.
Stakeholder Interest
Your stakeholders are increasingly focusing on ESG strategy and sustainability issues, including how companies manage environmental, social and governance (ESG) impacts, risks, and opportunities. 
Research suggests that suppliers and vendors are making purchasing decisions, employees are making decisions about where to work, and consumers are making decisions about what products to buy, based on the information provided about companies’ approaches to ESG.[3] While the environmental impacts of businesses are a critical area of focus, social and governance related issues can also prove to be critically important to a company’s long-term business health.
Global Momentum
Sustainability issues and the need for corporations to play a part in sustainable development have gained traction globally. The United Nations Sustainable Development Goals (SDGs) are the blueprint to achieve a better and more sustainable future for all, and were adopted by all UN Member States in 2015, as part of the 2030 Agenda for Sustainable Development. They address the global challenges we face, including those related to poverty, inequality, climate change, environmental degradation, peace and justice. The 17 Goals are all interconnected, and in order to leave no one behind, it is important that we achieve them all by 2030. Today, progress is being made in many places, but, overall, action to meet the Goals is not yet advancing at the speed or scale required.
Although the SDG’s were developed primarily for nation states, according to SASB CEO Janine Guillot, a range of stakeholders, including investors and companies, are expected to contribute towards achieving the SDGs.
How to Use this Toolkit
Regardless of your company’s size, structure or strategic goals, chances are that your stakeholders either are already, or will be, asking you for information on the topics discussed as part of this ESG toolkit.
Every company approaches ESG a little differently. We encourage you to review the information and the templates provided, to think about how the templates can be adapted for your needs, and then identify how the toolkit and the ESG process can strengthen your company in the changing environment in which we all live and work.
Some companies may find they are already focusing on and managing relevant ESG issues because of existing regulatory requirements, certifications and standards such RIOS, ISO 9001, and ISO 14001, which may provide context for how specific issues impact their performance (e.g., safety incidents, environmental violations).
If you’re uncertain about a term or an acronym you see in this toolkit, use our list of ESG definitions to help.
GRI Standards Documents for Disclosure & ReMA’s Excel Data Files
ReMA’s ESG Toolkit relies on the Global Reporting Initiative (GRI) standards, creating a series of Excel spreadsheets based on GRI to facilitate reporting for IRSI members. The following overview provides more detail on the documents developed for reporting data collection.
This data can then be used to prepare a comprehensive sustainability report that meets the requirements outlined in the GRI standards.
Using ReMA’s ESG Toolkit Files
1. GRI Files (See a breakdown of GRI disclosures in Chapter 6)
Our ESG Toolkit includes an overview document (GRI 1), disclosure spreadsheets based on the General Disclosures (GRI 2) that apply to our industry, and key topics (GRI 3):
- GRI 1 – Foundation overview document is an overview document. This is a PDF from GRI, it is not an Excel file.
- GRI 2 – Excel file of General Disclosures has been created. This spreadsheet includes disclosures that apply to all types of companies, including general information about a company and its operations.
- GRI 3 – Companies are expected to determine the topics that are material to their organization based on their Materiality Assessment. For each material topic, organizations are expected to disclose certain information. Material Topics from GRI have been used to create two separate excel files that cover topics related to the Environment (300 Series) and Social issues (400 Series) that are material for our industry.
Answering the questions in these Excel files for your company’s Material Topics will set you up well to fulfill the disclosure requirements for comprehensive GRI reporting. It will also provide most of the data needed for other reports, although formats may differ.
Want to learn more about GRI? GRI has offered ReMA members a 25% discount on all its GRI Academy courses using the code ISRI_25_sIK1lRib.
2. Additional Environmental Inputs file:
ReMA has created this additional excel spreadsheet specifically for members to use to gather data to create a carbon footprint. While there is some overlap with the GRI files, the intent of the Environmental Inputs excel file is specifically to facilitate the development of an organization’s GHG emissions inventory.
How to Implement the Process
Designate a responsible manager for the data collection programs. Create a timeline, and distribute information to the appropriate teams for completion. Make sure that your team has a copy of the links to the GRI guidance and glossary for their section(s).
- Read GRI 1 overview document: This will provide an overview of the GRI Standards.
- Complete GRI 2 Tables: Governance/General Disclosure Excel file.
- Complete GRI 3 Tables that align with your company’s material topics: This includes Series 300 (Environmental) and 400 (Social) from GRI. Guidance is provided in the excel files, as well as in linked GRI documents.
- If appropriate for your company, use ReMA’s environmental inputs file to gather data for GHG emission reporting and other operational details that you may wish to report. Then, calculate your emissions (learn how in the Environment chapter) and any other key data.
- Report! Use all the data you’ve gathered to create your sustainability or ESG report, whether a company-wide one or a report for a specific customer request. You can use an index to point readers to relevant sections by GRI disclosure number. If your reporting is voluntary, you may decide to keep your report internal at first, and build up to a public-facing report. Learn more in the Reporting Frameworks chapter.
Note: when working with ReMA’s Excel files, fields where your company should input data are shown in light pink.