Four Steps Your Business Should Take to Maximize its ESG Potential

What is ESG?

ESG stands for Environmental, Social, and Governance. It is a set of standards used to measure a business’s impact on society and the environment, as well as how transparent and accountable it is. ESG takes a holistic view that sustainability extends beyond just environmental issues. The three components that make up ESG are environmental, social, and governance. The environmental aspect focuses on how the business minimizes its impact on the environment, while the social aspect focuses on how the business treats its employees, customers, and the community. Governance refers to the processes of decision-making, reporting, and the logistics of running a business. In the United Arab Emirates (UAE), ESG has gained significant attention in recent years, with the government and businesses actively promoting sustainability and responsible practices. The UAE Securities and Commodities Authority (SCA) has been instrumental in driving ESG adoption. Here are four steps your business should take to maximize its ESG potential:

Assess current ESG performance: Assessing your current ESG performance is the basic step in maximizing your business’s ESG potential. Conducting a comprehensive review across all three ESG pillars and throughout different departments can help you understand your current state and identify areas for improvement. This review should include taking stock of any metrics you have to see how successful your current efforts are and tracking all stakeholders’ engagement levels. If there needs to be more adoption or adherence to the policies, consider why this might be. Elevate your ESG performance with our audit firm in UAE, providing thorough assessments to enhance your environmental, social, and governance practices. Once you have a clear understanding of your current ESG performance, you can set realistic goals based on a materiality assessment with both internal and external stakeholders. These goals should be measurable and achievable and should align with your business’s values and objectives. By involving all relevant stakeholders, including employees, customers, and investors, in the development and implementation of your ESG strategy, you can create a sense of ownership and commitment to the goals. In assessing current ESG performance, consider the following factors:

• Comprehensive Review
• Departmental Analysis
• Metric Assessment
• Adoption and Adherence
• Identify Improvement Areas
• Realistic Goal Setting

Set ESG goals: Setting goals for how a business handles environmental, social, and governance (ESG) matters is a really important step in being responsible and sustainable. This means creating clear, measurable, and achievable objectives by looking at what’s important for the business and getting input from both people inside and outside the company. It’s important to hear from employees and managers customers, investors, and government regulators outside the company. By getting all these different perspectives, the goals created can connect with the wider community and show a commitment to caring about society and the environment. The goals need to not only follow the rules but also match the company’s values and objectives. This way, working towards these ESG goals becomes a natural part of the company’s overall mission, promoting a complete approach to sustainability. By establishing these goals with clarity and precision, businesses can enhance their accountability, transparency, and credibility in the eyes of stakeholders, contributing to long-term success in an increasingly conscientious and socially aware global business environment. Empower your business to achieve ESG excellence with our audit firm in  UAE, helping you set and attain impactful environmental, social, and governance goals. In setting ESG goals, consider the following factors:

• Clear Objectives
• Measurable Targets
• Input from Internal and External Stakeholders
• Alignment with Business Values
• Community Connection
• Adherence to Rules and Regulations

Engage stakeholders: Engaging stakeholders is an important aspect of developing and implementing an effective Environmental, Social, and Governance (ESG) strategy. By involving all relevant parties, such as employees, customers, and investors, a company can foster a collaborative approach that ensures diverse perspectives are considered. Employees, being internal stakeholders, possess valuable insights into the company’s operations and culture, making their involvement essential for aligning ESG goals with daily practices. Customers, as external stakeholders, increasingly prioritize socially responsible businesses, and their input can guide the company toward strategies that resonate with consumer values. Investors, on the other hand, are often interested in the long-term sustainability of their investments, making their perspectives integral to shaping the financial aspects of an ESG strategy. By involving these stakeholders, a company not only gains diverse expertise but also cultivates a sense of ownership and commitment among participants, fostering a shared responsibility for achieving the outlined ESG objectives. Our audit firm in UAE  helps you engage stakeholders effectively through comprehensive financial assessments and reporting. In engaging stakeholders, consider the following factors:

• Inclusive Approach
• Collaborative Strategy
• External Stakeholder Priorities
• Investor Perspectives
• Shared Responsibility
• Regular Communication
• Alignment with Values

Measure impact and ROI: Monitoring and evaluating the impact of Environmental, Social, and Governance (ESG) initiatives is essential for the success of any comprehensive strategy. It involves the systematic tracking and reporting of progress toward achieving established ESG goals. Regular assessment not only allows a company to gauge its performance but also provides transparency and accountability to stakeholders, including employees, customers, and investors. By measuring the Return on Investment (ROI) of ESG initiatives, a company can quantify the tangible benefits and assess the effectiveness of its sustainability efforts. Demonstrating a positive ROI not only reinforces the financial viability of ESG strategies but also serves as a powerful tool for garnering support from investors and other stakeholders. 

By following these steps, your business can create a robust ESG strategy that not only benefits the environment and society but also contributes to your company’s long-term success. Here are the factors to consider in Measuring impact and ROI:

• Systematic Tracking
• Regular Assessment
• Transparency and Accountability
• ROI Measurement
• Stakeholder Reporting

Need Assistance to Maximize Business ESG Potential:

BRISK assists you in maximizing your business’s ESG potential with customized strategies, working closely for sustainability. As your committed partner, we navigate ESG expectations, offering tailored solutions and guidance for enhanced performance. Here are some areas where we can help:

• ESG due diligence: If you are looking to acquire a company, this focused assessment can help you identify red-flag risks and opportunities related to governance, human resources, environmental practices, and more.

• ESG strategy roadmap: A customized roadmap can help you assess your current ESG strategy, identify gaps, and plan for your future. Once you have identified your goals and priorities, we will help you move from the “what “ to the “ how” and get you connected to our specialized team.

• ESG Education: From your brand to your C-suite to your customers, our team can help you educate your company on ESG as a whole -and which parts of that whole best benefit your business.

• Greenhouse gas emissions accounting: Whether you are preparing for potential SEC requirements, an M&A deal, or looking to set up your reporting, our team can help you evaluate and measure your GHG emissions.

• Stakeholder engagement & materiality analysis: Our team also helps you engage with stakeholders and perform a materiality analysis to identify the issues that matter most to your stakeholders, including investors, customers, employees, and others.

• Responsible sourcing: A complex supply chain can be a challenge but a strong responsible sourcing program can protect your reputation and relationships.

BIPOC, women, and veteran-owned business support: Crowe Beacon is the select suit of services for high-growth BIPOC, women, and veteran-owned businesses. We can help your business reduce obstacles, improve performance, and create stability.