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Creating responsible and sustainable value with an ESG strategy

November 19, 2024

More than ever, environmental, social and governance (ESG) considerations are essential to long-term corporate strategy. Investors, consumers and employees favour companies committed to sustainability, social responsibility, and sound governance practices. For companies, especially those operating in competitive markets such as Montréal, developing and implementing an ESG program is not just about regulatory compliance, it is also an opportunity to improve performance and ensure longer-term growth. It is a key tool for designing a future that is not only sustainable, but also resilient.

Why is ESG so important for companies?

Attracting investors and capital

  • ESG factors are increasingly influencing responsible investment decisions, as it has been shown that the companies that best integrate these factors better perform in the long term. Institutional investors and other stakeholders are looking for companies able to demonstrate sound, sustainable practices that create long-term value. Because of this, a well-defined ESG strategy can open new financing opportunities.

Enhancing brand reputation

  • Consumers are better informed than ever, and carefully choose the brands they support. Companies that innovate in ESG practices are more likely to retain their clients, which translates into a better competitive position in the market. What’s more, a strong ESG reputation attracts talent, as many professionals seek to join organizations aligned with their values.

Ensuring regulatory compliance and risk management

  • Governments are strengthening regulations on environmental standards, social equity and governance. By adopting a proactive ESG strategy, companies can not only ensure compliance, but also mitigate the risk of legal and regulatory sanctions, while positioning themselves favourably on reputational matters.

Improving operational efficiency and cutting costs

  • ESG initiatives often lead to efficiency gains. Reducing energy consumption, minimizing waste, and optimizing supply chains are all actions that benefit the environment and cut costs. Promoting diversity and inclusion also boosts innovation and team productivity.

A few tips for developing and implementing an effective ESG strategy

1. Conduct a materiality assessment

Start by identifying the ESG issues most relevant to your company and its stakeholders. Assess the potential impact of various environmental, social, and governance factors on your business and your long-term success. Get your internal and external stakeholders involved so that you can understand and prioritize what they are looking for. This approach will form the basis of your ESG reporting and help you focus your efforts.

2. Set clear, measurable goals

Once the priority issues have been identified, it is time to set specific, measurable goals. For example, if conserving biodiversity or reducing carbon emissions are goals, you should define a precise target to be reached within a given timeframe. These goals need to be ambitious and realistic, and aligned with your company’s overall strategy.

3. Make sustainability an intrinsic priority of your corporate culture

To be successful, an ESG strategy must be at the heart of a company’s concerns. The principles defined in your ESG program will guide your day-to-day decisions at every level. For example, management must lead by example, and employees must be encouraged to contribute actively to the company’s sustainability and social responsibility objectives.

4. Communicate transparently

The way in which companies disclose their ESG performance, strategies, and metrics continue to evolve in line with new rules and standards. Regularly communicate your ESG goals, initiatives and progress, whether through reports, press releases, or social media updates. Sharing challenges also shows a sincere commitment to continuous improvement.

5. Performance assessment

ESG is everybody’s business. Set up rigorous monitoring mechanisms, such as key performance indicators (KPIs) and regular internal reviews, to measure your progress. Use this data to adjust and reinforce your strategies over time. Reporting on your progress not only enhances your credibility, it also provides valuable information to foster innovation and progress.

 

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