Service: ESG-strategy
The sustainable development trend is spreading at a phenomenal rate. You will not surprise anyone with sorting tanks, abandonment of plastic, and eco-friendly life. However, it is the changing values of recent years and the COVID-19 pandemic that have shed light on the need for a strategic approach to environmental and social risk management. Investors are increasingly insisting that companies comply with ESG criteria, international policies, and procedures. Companies that are already working on the presence of environmental, social, and governance components very soon will be far away from competitors.
What is an ESG?
Environmental, Social and Governance Criteria (ESGs) are a set of company performance standards that environmentally and socially conscious investors use to assess potential investments.
Environmental (environmental criteria) show how the company affects and interacts with the environment. These criteria include but are not limited to climate change, biodiversity protection, water and energy use, greenhouse gas emissions and the environmental management system.
Social criteria reveal how a company interacts with employees, suppliers, customers, communities and other stakeholders. The social criteria include: equal opportunities, gender equality, human rights, labor protection, corporate social responsibility, social management, corporate culture etc.
Governance (governance criteria) relate to the corporate governance, composition and activities of the board of directors, availability of audit, internal control and shareholders' rights. As well as business ethics, anti-corruption and compliance.
According to the European Green Course, by 2050 all member states will have a circular economy, achieving zero emissions. Irreversible changes are taking place around the world: introduction of carbon taxes, formation of a carbon trading market, development of eco-labels, transformation of businesses towards a green economy, while the financial and banking sectors are actively integrating the ESG approach into their funding criteria.
Why do you need an ESG strategy?
At the beginning of the journey without an orderly, structured and clear course of action, even the greatest efforts can be nullified. ESG - strategy is your clear guide to sustainability.
Що робимо ми:
Analysis of your current company’s activity: ESG-screening and road map
Development of the strategy itself
SWOT-analysis / improvement of existing business processes of the company
Construction of targeted management strategies in accordance with international standards for each of the criteria
E&S external and internal reporting
Analysis of economic feasibility and sustainability of the financial model
Audit when creating a new business project
Comprehensive assessment of business activities and risk identification (Due diligence) in accordance with the standards of international financial institutions (IFIs)
Also, the ESG strategy:
- opens the way to attract new investment
- increase capitalization
- improve operational efficiency
Stages of building an ESG strategy
The ESG strategy will open the way to stock exchanges and interest international financial institutions, as well as help to declare your transparency, innovation and responsibility.
Step one
Analysis of the current situation
- audit of existing business processes and production sites
- collection and analysis of developed documentation (programs, policies, procedures, etc.)
- analysis of the effectiveness of management processes or implemented management systems
- interview with senior management and staff.
- collection and analysis of developed documentation (programs, policies, procedures, etc.)
- analysis of the effectiveness of management processes or implemented management systems
- interview with senior management and staff.
Step two
Building and maintaining processes
- preparation and discussion with the company of the road map based on the results of the analysis
- development of the necessary documentation
- consultation on the implementation of the road map and planning of short- and long-term goals
- recommendations of the company to achieve the chosen course of ESG-strategy (meetings with top management, webinars, workshops, strategic sessions)
- development of the necessary documentation
- consultation on the implementation of the road map and planning of short- and long-term goals
- recommendations of the company to achieve the chosen course of ESG-strategy (meetings with top management, webinars, workshops, strategic sessions)
Step three
Strategy implementation
- full support of documented requirements (programs, procedures, policies)
- coordination of management systems processes to achieve your goals
- training of employees and top management
- coordination of management systems processes to achieve your goals
- training of employees and top management
ESG risk assessment
To evaluate the company according to ESG criteria, we have developed a risk assessment matrix. It includes:
analysis of the current situation
compliance with legal requirements and international recommendations; documented procedures and policies
implemented management systems in the company
training systems for employees and their awareness of the processes in the company
involvement of senior management, etc.
Each criterion has its own sub-clauses and assessment. Total points = ESG risks of the project / company. The maximum number of points is 25.
The risk categorization is indicated in different colors: green is the lowest risk and brown is the highest.
The risk categorization is indicated in different colors: green is the lowest risk and brown is the highest.
critical risk
high risk
average risk
low risk
unacceptable level of compliance
less than 60% ESG compliance, corrective actions needed as soon as possible
not all basic principles are followed, it is necessary to develop an action plan with corrective measures, responsible persons and deadlines
acceptable level of compliance, no corrective action needed
25-21
21-15
15-10
0-10
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