How to make your business change the world
By Sherlyn Assam
For some businesses, environmental, social and corporate governance (ESG) is an opportunity to impress clients and investors. For others, it signals reporting requirements to the federal government. But if you don’t have a publicly traded company and your stakeholders don’t prioritize environmental, social and governance progress, these measures may not influence how you run your business – yet.
Take the “E” – environmental. If the global community can limit its emissions to a net zero by 2050, global warming can be limited to 1.5 degrees celsius and delay irreversible climate damage. Did you know SMEs contribute to around 30% of Canada’s greenhouse gas emissions?
Don’t underestimate how responsible procurement impacts future clients. According to a Business Development Bank of Canada (BDC) study, 82 percent of major buyers in Canada require suppliers to meet at least one ESG measure.
“Small and midsize businesses will be left out of big contracts without ESG. That’s a real tangible threat,” says Lindsay Hampson, the founder of ThisRock.
ThisRock helps SMEs become sustainable while staying profitable. Her clients say their potential clients are asking if they have environmental policies in place or if they’re tracking emissions.
“They’re either losing customers because they can’t say yes, or they’re not winning deals,” says Hampson.
Hampson says she created ThisRock while pursuing her MBA because she realized many businesses would need help changing to fit into a sustainable future.
Hampson describes ThisRock staff of sustainable business advisors as the “fractional sustainability managers” many enterprises don’t have. In three phases, they collaborate with businesses to understand where they are in their sustainability journey and what they can achieve. ThisRock reviews and assesses current ESG measures, strategizes and implements new initiatives, then helps with communications and training so businesses can show stakeholders their progress.
While each business she works with is unique, Hampson says a good place to start is by looking at their fleet. For example, if a business has 80 trucks on the road, ThisRock will collect the businesses’ data to assess how to make their transportation more efficient. This could mean creating a timeline to swap gas or diesel-powered vehicles for electric or hybrid and strategizing how to save the company money over time.
There’s also opportunity for sustainable practices within employees’ daily tasks.
“Training your employees on waste and water and energy usage can really help because maybe people aren’t turning off lights at night.” Hampson says even travelling to work for two days instead of five makes a “huge difference.”
But training doesn’t just stop at energy – “Ethics training, human rights training, diversity, equity, inclusion training can make a difference too because then everyone will be on the lookout,” says Hampson – and ESG doesn’t just stop at the environment. Progressive social and governance practices also hold weight. When ESG becomes company culture, business practices change from the outside in.
This provides opportunities for organizations like the International Transport Workers’ Federation (ITF) to gain more traction. The ITF is a global collection of unions protecting transport workers’ rights, safety, pay and work conditions. Representing over 18.5 million transportation workers around the world, the ITF collaborates with responsible employers to promote and provide accountability for sustainable business models for their workers’ rights.
ITF can ensure the companies you hire to transport your goods or receive the materials for your products are prioritizing the health, safety and wellbeing of its transport workers.
Their resources also help inform sustainable business practices and just transitions within the workforce,.
While these consultations, training, and campaigns can seem easy enough to organize, business advisor Jenifer Bartman says this isn’t the case. “Business leaders who are thinking about this – number one, they need to roll up their sleeves and do some research,” she says.
Meeting ESG requirements doesn’t get instant returns. It can increase operating costs and administrative burdens. Bartman emphasizes finding business advisors or industry associations who are committed to helping companies making sustainable transitions.
These industry associations support businesses that wish to improve their sustainability:
- Anthesis Provision is a team of food and beverage sustainability experts who work with manufacturers to make their food and beverages sustainable while costing them less.
- The Retail Council of Canada works with sustainability experts to share emerging issues and opportunities with its retail members.
- The Mining Association of Canada is a sustainability program that helps mining companies provide minerals, metals and energy products in a way that is environmentally responsible, and socially and economically beneficial.
Other associations tackle supply chains across industries, like the Canadian Collaboration for Sustainable Procurement. It is a network of public-sector institutions who share information and co-create tools to address environmental, Indigenous, social and ethical risks in supply chains.
ESG can mean choosing responsible suppliers. “Business leaders can now start to be a little bit more selective around, “What is it that we want to buy? Who do we want to buy from? What do we need to look for?”” says Bartman.
The BDC’s study says large companies will be encouraged to include supply chains in their ESG performance. Companies will need answers about reducing energy consumption (E), making community investments (S) and acquiring sustainability-related certification (G) and more.
Bartman says business leaders “shouldn’t be shy in asking these kinds of questions” when talking to suppliers. The suppliers companies are working with should “be able to point to the policies and practices, who’s in charge, and what are some of the things that they’re actually doing to respond to these areas.”