More than ever, environmental, social and governance (ESG) issues are high on the corporate agenda. At the same time, 2022 is a year of financial hardship for many companies. Due to the aftermath of the corona crisis and the war in Ukraine, the prices of raw materials, energy and semi-finished products in particular are rising sharply, which means that keeping their heads above water has often become a key issue. Logically, many companies are wondering what to do with ESG in 2022. Should we press ahead now, or would it not be better to put the activities that do not yield immediate financial gain on a lower gear? In this article, we share our vision.
Wake-up call for ESG-related issues
Markets and organizations do not float in a vacuum, but are thoroughly intertwined with the world and all of its natural limits and social context. This has never been different, but the corona pandemic and the Ukraine war have again made us extra aware of this reality. Specifically, the pandemic with its health risks to employees has forced companies worldwide to redesign their processes and accelerate their digital transformation. Similarly, the war is forcing, among other things, an explosion in energy costs, the search for alternatives to Russian oil and gas and the adoption of an ethical position on what is happening. More generally, both crises show that we cannot focus purely on financial progress, because sooner or later we will run into a wall that way. ESG is simply a prerequisite for success.
New European directives
Another issue that all large companies (and the smaller companies they work with) will have to deal with is the Corporate Sustainability Reporting Directive (CSRD). Starting in 2024, this new directive will require companies to report on the impact of their activities on people and planet. And while 2024 may seem far away, companies would do well to prepare now if they want to get this right. In addition, keep in mind that within the CSRD, not only is there a lot of focus on reporting on carbon emissions and the like; companies are also expected to develop strategies and implementation plans to improve their environmental, social and governance performance.
What you can do right now
Obviously, we do not believe that companies and organizations should put their ESG transformation on pause mode. On the other hand, we also believe that you have to be realistic. When you can still just about meet all payment obligations, this may not be the ideal time to make the entire production process climate neutral. However, even with limited resources, more is often possible than you think, and it can also be financially interesting. For example, screening and reconsidering suppliers does not have to cost you much, and besides a lower carbon footprint, it can even help you save on (indirect) energy costs. And mapping relevant data sources now for your 2024 CSRD reporting, for example, will create a lot less hassle (and high costs for sustainability consultants and accountants when everyone needs them) than if you start at the end of next year.
ESG in 2022: a lot is already possible in one day with the Empact Academy
Since 2006, we have been helping organizations realize their sustainability ambitions and successfully transform into a future-ready organization. We now do this based on a systematic approach, which has now amply proven itself. And, since this year, also with the highly interactive workshops of the Empact Academy: in just one day or part of a day, our experts will bring you up to speed on all relevant information regarding a specific topic, tailored entirely to your organization, so that you can get to work right away. In our view, the following ESG topics are the most relevant in 2022:
- From ESG compliance to strategic ESG for financial and social value creation
- ESG compliance
- Understand and apply OECD due diligence guidelines in view of the upcoming Corporate Sustainability Due Diligence Directive
- Start your ESG procurement and supplier journey
- Activate ESG in your procurement and supply chain
- Develop and implement a compelling ESG strategy
- Write and publish annual ESG and CSR reports
- Setting up an internal ESG team
Other topics are also always possible. Just ask! We are happy to help you.