Secret de Polichinelle: How sustainable partnerships integrate their ESG with the UN SDGs
SDGs and the ESG are important. They are two of the most important ones that can help to create value for an organization. The more closely they are knit, managed and approached strategically, the more value they bring to organizations in mitigating risks and engaging key stakeholders.
What is ESG? What do they mean? What value do they bring to the organization?
Simply put, ESG stands for the Environmental, Social and Governance structures of an organization. The entire reporting stresses on how the organization manages issues, risks and opportunities related to environment, social and governance. It is a simple reporting procedure and does not necessarily need to be complicated (that many assume it to be).
And then, what are the SDGs on the other hand?
SDGs are the 17 areas of Sustainable Development Goals set forth unanimously by all member states of the United Nations during its Summit on Sustainable Development in 2015. Its main message was to implement the 2030 Agenda for Sustainable Development, addressing climate change and strengthening global partnerships to engage all the stakeholders that contribute to rapidly increasing changes of our planet Earth.
And so, the SDGs and ESG are related to each other. Going a step further, the ESG could even be called a subset of the 17 SDGs as all of them could easily fit and correspond to one of the 17 SDGs set forth. They all address the environmental, social and governance issues and so, the more organizations associate their ESG reporting with the SDGs, the more value they generate communicating with their key stakeholders. An organization addressing both the SDGs and ESG together or separately (and especially together), simply adds more weight to its value chain and also helps mitigate risks.
When organizations are working on their ESG report on their key issues, it is best to try and correspond each of their reporting factors with that of the 17 SDGs set forth. They will correspond to some, if not all of the SDGs and it is best practice to note them, that makes it easier to communicate with the stakeholders.
The impact of “Environmental” in ESG reporting:
A key recommendation could be that the Environment section of the organization’s ESG report corresponds to most of the SDGs. It today differentiates a well-run company or organization where they continuously keep an eye on their SDGs impact. There is a constant supervision on each of the SDGs and how their emissions and GHG reduction targets associate themselves with those SDGs. It does not have to be that organizations target all the SDGs, which is understandable. But it is the small contributions through reporting, that makes the difference in communicating their targets and achievements (and also areas of focus) to their partners and stakeholders. This then becomes an important facet of the Environmental section of the organization’s ESG report.
It is an extremely valuable asset which organizations furnish on their integration of ESG reporting with the SDGs. What this not only fosters is mitigating risks, but also the communication that partner companies are more keen on further strengthening ties with the reporting organization. And so, there is a competitive advantage and compelling evidence for the organization’s key partners and stakeholders, to indulge in a partnership going forward.
And so, is an ESG reporting connected to the SDGs? Yes! And the more organizations integrate their strategies with the SDGs, the more they contribute to a sustainable future. Note, that the ESG report does not have to too comprehensive, but an initiation of the idea to integrate strategies with the SDGs itself is a platform for opening partnerships with like-minded businesses.
At the Exponential Group, we expertise in supporting organizations with ESG reporting and Sustainability standards. Know more about our ESG tools and how we standardize reporting.