Implementing an ESG policy is a long process. To help SME’s, Grant Thorton, BECI, and many experts from the ESG Countdown Community share a practical mix of theory, tips, testimonials and insights during a series of 2022-2023 monthly webinars hosted by the CONNECTS platform.
Environmental strategy: finding what’s material before acting
If you want your ESG policy to be efficient, focus on where your main leverages are… Our third webinar held on 22 December was dedicated to the crucial step of identifying material issues when devising a sustainability plan. Speakers focused in particular on the “E” aspects of ESG materiality.
Following an introduction by Joost Vissser, CEO of CONNECTS, Grant Thorton’s Isabel Derison started by reminding the audience what a materiality is : a risk or an opportunity which is both significant and impactful either from an “outside-in” (the effect on environmental changes on your organization) and “inside-out” (vice-versa) perspective. Think for example of how resource depletion, deforestation, loss of biodiversity, pollution, extreme weather may impact your business, but also how you can mitigate such risks by reviewing your water management, carbon management, circular economy practices, use of materials, etc…
“Identifying such materialities will allow your company to make a real difference instead of a simple box ticking exercise”, Isabel Derison stresses. An airway, for example, will find many more CO2 related materiality in it’s fuel or fleet management than in the way it paper is recycled in its office.
However, doing this inventory in a complete way doesn’t necessary mean doing it all at once. “One may starts with inside-out approach first” said Isabel. Additionally, there are several ways for a company to identify such “hot spots”. This can be done, in some cases, in the context of a stakeholder dialogue that will also feed all your ESG process later on, or by benchmarking your own situation with peers and other industry players.
The circular way
Her colleague at Grant Thornton, Niels Breugelmans, explained how the adoption of circular economy principles can be a good way for any company to manage several environmental materialities at the same time. To do so, establish your strategy by identifying in your designing, sourcing, core production, support activities and in your product life-cycle where you can apply the “R” ways of doing… That is Refuse (unecological material or processes), Rethink and Recover energy all along the way. And in the course of your own processes: Reuse, Repair, Refurbish, Remanufacture, Repurpose, Recycle. “It is all about optimized usage of products that will also bring a lot of value”, Niels explained.
As a Sustainability specialist in the first telco worldwide to have set carbon neutral science based targets for its own operations, Romy De Mayer had interesting insights to share. Proximus defined its own materiality topics in collaboration with all stakeholders through several “inside-out” assessments. In the field of environment, they include carbon and energy reduction, sustainable infrastructure, circular economy and environmental solutions.
“The areas we defined as “ material” are now where the company focuses most of its efforts on, aiming at very concrete targets it has set for itself”, Romy explained. These include achieving net zero emissions by 2040 and becoming a truly circular business by 2030. This will imply, for example, the use of 100% renewable electricity by the same year as well as 90% of waste recycled and a fuel-free management car fleet by 2025. But also a great emphasis given to “R” policies in procurement processes, the complete refurbishment of the building hosting Proximus headquarters or the sharing of its cable network with other operators.
Romy also stressed that double materiality legal requirements for large companies prompted Proximus to accelerate. A first recent “outside-in” materiality assessment exercise, including financial impact, was recently made through internal workshops with employees.
Quality is sustainability
Full Stack Supply Co (FSSC) is a Swiss brand platform focused on the outdoor industry, including ski & snowboard material and outwears. For Sara Asmoarp (Change Lead) and Ciara Chauvineau (ESG Lead), “quality is sustainability” is a moto which drives the company in all its doings, from supply chain to production. The company obtained a “B Corp” recognition process. “It is a nice acknowledgement but engaging in the process was above all very useful because their materiality assessment model is standardized in a very user-friendly way. It was very important for the SME that we are”, said Ciara.
Sara insisted then on the bottom up approach to incorporate sustainability in everything FSSC do. “From employees to all stakeholders, the ESG bit is everywhere. The purpose of our company must have an environmental benefit” she stresses. The materiality assessment of FSSC encompasses a plethora of topics including water management, hazardous waste, chemicals (skis, for example, are made of high tech polymers), packaging, circular business and others. “Environmental materiality is not linear, nor static. All our indexes will move to become compulsory in the next 5 to 10 years”, she adds, stressing again the importance of legal framework.
Cooperation & transparency
Among all lessons learned is the fact that “it is better to be imperfect and to try, than not doing anything”, thereby underlining an unavoidable learning curve. Another key point is a spirit of cooperation within the industry and a supply chain that is transparent enough to ease your impact assessment. In that regard, long lasting relationships and local sources not only favor good logistic flows, but also trust, quality, trackability and the transparency that is needed for your to collect all relevant ESG data. “The ultimate solution is to produce the right product at the right place”, she concludes.
Finally, Caroline Grégoire from Demco, a Tunisia based Jeanswear & Knitwear manufacturer, explained well how a sound materiality assessment will serve as a strong basis for an articulated sustainability plan. DEMCO’s one includes 16 objectives that should be reached through the completion of an impressive list of 32 actions. There again, a shift to circular economy will be instrumental, including the use of solar power, the recycling of water, zero discharged liquids, the redesign of products. “ESG thinking goes hand in hand with achieving more efficiency in industrial processes”, she stresses. “It must be supported by good management practices and good governance”, she pointed out.
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