Addressing the increasing awareness of ESG factors within the investment community, this resource helps to unravel the complexities associated with the outcomes of ESG ratings and identify a clear course of action for improving ESG performance over the long term.
Applying the ESG Program Canvas: Workshop instructions Time required: 2½ hours
In a workshop with about four to eight participants, the canvas aims to determine how the current ESG rating outcomes relate to the company’s sustainability approach and determine effective interventions and actions.
As groundwork for the workshop, the facilitator prepares an analysis to summarize the existing company’s ESG scoring on the provided criteria such as climate change strategy, labor conditions or governance. Typically, this is accomplished by creating a simple heatmap that exhibits the company’s backlog on the individual criteria to the industry sustainability leaders. In the exceptional case that the industry leader’s score is not readily available, the relative score level can be estimated by developing a rough industry ceiling from the annual reports and sustainability programs of selected competitors.
The workshop itself starts by filling in the sustainability strategy checklist (refer to the table) in a plenary brainstorming format.
Once the checklist has been completed, the results can be compared against the heatmap score of the industry sustainability leaders and the ESG criteria that are emerging as weak spots can be determined. This two-way mapping process uncovers the main ESG performance gaps from both data analysis as well as team experience.
To start planning for improvement, identify possible causes of the ratings outcome from the sustainability strategy checklist in groups of two to four participants and ask the groups to come up with ideas for improvement. In a plenary format, all interventions and actions can be shared and then clustered and mapped in the Interventions & Actions section by jointly estimating their impact and feasibility. In some cases, the group was able to reach a consensus on the priorities, so only a few interventions were required, One illustration is that of a company in the building materials sector where, during the application of the ESG Program Canvas, the team decided to bundle their efforts on improving the structure of health and safety reporting in their industry and on the impact measurement of their business.
After the workshop, a summary of the most appropriate interventions is prepared including the ownership of the action points and timing.