No Match Found
A new sense of urgency about ESG will bring about a revolution in many companies, with far-reaching changes in their strategic choices, the management and structuring of their organisation and reporting in this regard. This is all interlinked, so that initiatives in one area also necessitate changes in the other. Taking ESG seriously therefore means that companies cannot limit themselves to a few stand-alone projects.
ESG has been on the agenda of many Dutch companies for years. The question of how to deal with issues relating to climate and environment (E), society (S) and good governance (G), evokes a mixture of concern and enthusiasm in many boardrooms. What risks do we run? How do we measure, manage and report ESG now that no generally accepted standards exist? What should we focus on while there is a long list of possible issues?
Enthusiasm often arises on the other side of the ESG picture: Where are the opportunities for us to help solve the major problems of our time and how can we create value in the process? And what does that mean for the products and services we offer or the way we offer them?
Various developments make these questions topical:
By 2021, these forces seem to have resulted in a tipping point. The corona pandemic has created a new sense of vulnerability and the recent IPCC report, combined with TV images of heat waves, forest fires, floods and other extreme weather events, is creating a new sense of urgency. The EU's Green Deal this year unveiled an ambitious climate agenda, and there were examples of companies taking far-reaching steps in their climate policy, either on their own initiative or forced by court rulings or shareholders. Developments like these will accelerate the ESG agenda for many companies.
Companies will therefore have to be prepared for fundamental changes in virtually all aspects of their organisation, in what we call the three dimensions of the ESG revolution: reimagined reporting, strategic reinvention and large-scale business transformation. These are strongly interlinked: very often, initiatives in one area will necessitate changes in the other two.
ESG means something different to every company. Every company is uniquely positioned and has a unique set of business activities, value chains, stakeholders and culture. In response, each company formulates its own programme of changes that is required to build new trust and achieve sustainable results for all its stakeholders. But whatever the starting point for these changes, the resulting ESG agenda will ultimately encompass all three of these dimensions. Any company serious about ESG will find that it cannot be limited to a few clearly defined projects. Rather, taking ESG seriously means starting a revolution. Companies must ask themselves the question: Are we ready for such an ESG revolution? And if the answer is no: What do we have to do to be ready? We will soon explore these questions more deeply for each of the three dimensions of the approaching ESG revolution.
To create value through ESG (environmental, social, and governance), you need to put the theory aside and develop a concrete and practical plan to get started. Being successful is not just about finance, disclosure, climate change or diversity. It is about embedding all of these - and other - principles in your strategy and activities. It is essential to embed ESG factors into your company's strategy and transformation, as well as into reporting and assurance to ensure a successful sustainable future.
Partner, ESG Lead PwC NL & PwC Europe, PwC Netherlands
Tel: +31 (0)65 536 23 07
Partner, Sustainability, PwC Netherlands
Tel: +31 (0)65 378 26 45
Partner, PwC Netherlands
Tel: +31 (0)65 156 64 70
Partner, PwC Netherlands