In a world where environmental, social, and governance (ESG) issues are at the forefront of investors' and consumers' minds, having a strong sustainability strategy is crucial for any business.
But how do you create a sustainability strategy that delivers real impact?
The key is to track the right ESG metrics at the right time and using the right tools and techniques.
Tracking ESG metrics is essential for understanding your company's impact on the environment and society, as well as for identifying areas where you can improve your sustainability efforts.
By focusing on the metrics that matter most to your company, you can create a more effective and focused sustainability strategy that aligns with your business goals.
Let’s discuss five key ESG metrics that most businesses should track to help create a strong and impactful sustainability strategy.
By the end of this article, you will have a better understanding of the ESG metrics that are most important for your business and how to use them to create a more sustainable and profitable future!
Reducing carbon emissions is a priority material concern for everyone across the world, including companies.
A carbon footprint is the total amount of greenhouse gases (GHGs) emitted by an entity.
Measuring and tracking your carbon footprint can help you identify areas where you can reduce your carbon emissions, and ultimately, your environmental impact.
To track your carbon footprint, you can use a carbon calculator tool or work with a carbon expert.
Once the emissions inventory is established, you can set targets for reducing them and implement initiatives — such as energy efficient operations, sourcing electricity from renewable resources, reducing waste, etc. — that help reduce, remove or avoid emissions.
Diversity and inclusion
Diversity and inclusion are crucial for creating an inclusive and equitable workplace.
Tracking metrics like gender and racial diversity can help identify gaps in your workforce and implement initiatives to create a more diverse and inclusive workplace.
Additionally, embedding diversity, equity, and inclusion in the board room is essential for effective governance and ensuring that decision-making is inclusive and representative.
To track diversity and inclusion metrics, you can conduct employee surveys, track hiring and promotion rates, and set diversity and inclusion targets.
You can also implement initiatives such as unconscious bias training and mentorship programs to promote a more inclusive workplace culture.
Employee engagement is an important metric for measuring social sustainability.
Engaged employees are more productive, more innovative, and more likely to stay with a company in the long run.
Tracking employee engagement metrics like job satisfaction, turnover rate, and employee feedback can help you create a sustainable and engaged workforce.
Employee engagement and satisfaction can be tracked via employee surveys, focus group discussions, turnover rates, and employee retention rates, to name a few metrics of measurement.
Implementing initiatives, such as flexible work arrangements, employee recognition programs, and professional development opportunities can also help improve employee engagement.
Supply chain sustainability
Supply chain sustainability is a material ESG concern for companies.
Tracking metrics like supplier diversity, environmental impact, and labor practices can help you identify potential risks and opportunities for improving ESG performance of supply chains.
To track supply chain sustainability, you can conduct audits of your suppliers, identify goals and targets for sustainable supply chain management, and track supplier performance metrics.
You may encourage supplier diversity, responsible sourcing, and green supply chain practices.
To further promote sustainability within your supply chain, you can also request credible certification of sustainability from your suppliers, such as EcoVadis certification.
EcoVadis is a global sustainability rating system that evaluates companies' sustainability performance across four themes: environment, labor and human rights, ethics, and sustainable procurement, based on 21 criteria.
Community impact is an essential social sustainability metric for ensuring sustainable decision-making within a company.
To track community impact, you can measure your company's charitable giving and community involvement, track employee volunteer hours, and measure the impact of your community initiatives.
While this may not be applicable to all company sizes, particularly early-stage startups, it's still worth considering as a future goal to strive for. Keep it in mind as something you aspire to achieve as your business grows and evolves!
How to get started
Tracking ESG metrics and implementing a sustainable strategy can be a daunting task.
Gathering information manually and tracking it through various documents can be challenging.
But what if there was an easier way to achieve your sustainability goals?
We have the solution!
With Apiday’s powerful Sustainability Roadmap tool, you can easily identify risks, prioritise actions, and track progress towards your objectives.
And Apiday’s Automated Reporting Tool will help you report on your metrics, identifying material topics and extracting all relevant information to create insightful reports.
Our team of ESG experts will be with you every step of the way to ensure your success.
Say goodbye to the complexities of sustainability reporting and embrace a simpler, more effective approach with Apiday!
While these top five ESG metrics we have discussed are essential for most businesses, there may be other ESG metrics that are relevant to your industry.
For example, if you are in the manufacturing industry, tracking water management, energy consumption, and waste generation may be crucial for reducing your environmental impact.
If you are in the financial industry, tracking metrics like responsible investing and financial inclusion can help align business practices with your industry and company-specific ESG goals.
In conclusion, by tracking the ESG metrics that are most relevant to your business and industry, you can create a more focused and effective sustainable strategy that aligns with your business goals and contributes to a more sustainable future!