Aligning ESG and business strategy
A successful ESG policy is aligned with business strategy, helps maintain share price value and effectively manages reputational exposure. Wherever your business is on its ESG journey, Ramboll can help develop or revise ESG policy and strategy to be aligned with ESG objectives.
Secure your market position, your future and financing
Companies must identify ESG priorities for all stakeholders and focus on materiality – the ESG aspects most relevant to your sector, geography, business ESG maturity and overall operating context. Good ESG management demonstrates to stakeholders that both short and long-term risks are being managed, and opportunities to turn them into value-creation possibilities are being sought.
Investors are increasingly expecting corporations to report their ESG performance on voluntary disclosure platforms such as CDP and in public ESG reports prepared in accordance with the Sustainability Accounting Standards Board (SASB) or the Global Reporting Initiative (GRI) standards.
Investors also utilize corporate ESG ratings (eg Dow Jones Sustainability Index, Sustainalytics, MSCI, ISS) when making investment decisions. Finally, new mandatory reporting standards are rapidly being introduced, along with an ever growing, ever changing regulatory framework.
Your ESG strategy will anticipate these and maximize your performance within them. Ramboll can help you develop a strategic approach to reporting that highlights your accomplishments and presents the metrics that investors and ratings agencies are looking for.
Build resilience and adapt to future trends
Being poised for change is vital to thrive. Future-proofing involves being ahead of changing regulatory requirements and increasingly strong public opinion on issues such as plastic use, pollution, the climate and biodiversity net gain.
Ramboll can help you adapt to future trends such as a post-pandemic way of working, the transition to a low-carbon economy, forthcoming changes in chemicals regulations, new financial reporting disclosures including the Task Force on Climate-Related Financial Disclosures (TCFD) or implementing adaptive strategies to become more climate resilient.
As well as an expanding climate and ecosystem consciousness, market demand and stakeholders have expectations around subjects such as plastics use and equality, diversity and inclusion, and Ramboll can help you stay ahead.
Competitive advantage of strong ESG management
Improved trust with stakeholders translates to competitive advantage. Investors need to trust the companies they invest in, and regard ESG as synonymous with taking risk seriously.
Evidence is mounting of the brand, staffing and bottom-line benefits of strong ESG management. Ramboll’s strategic partner, IMPACT ROI3, finds that superior ESG performance can help companies:
- Increase sales by as much as 20%
- Boost share price by as much as 6%
- Increase firm market value by as much as 11%
- Reduce employee turnover by as much as 50%
- Insure against reputation and litigation risk by as much as 7% of total market value
Strong ESG management also helps avoid prosecution and protects against reputational and material impacts from ESG-related poor performance.
Demonstrating business value of ESG
ESG materiality can affect a company in many ways. As volatility increased and markets went down in early 2020, stocks with high ESG ratings outperformed the market by over 5%4. However, better performance on environmental and social factors can also generate new opportunities, reduce risk and reduce cost:
- Consumer, investor and supply chain behavior is shifting towards ethical and sustainable actions, opening up new markets.
- Good governance can mean stronger relationships with suppliers, leading to reliable provision of vital materials.
- Good management and resource efficiency allow cleaner, cheaper and more reliable provision of raw materials and natural resources like water, that are becoming scarcer.
- Identifying opportunities on-site to create renewable energy will provide cheap, clean energy for the long term, and potentially serve as a source of income.
- ESG policies and practices create operational efficiencies, helping companies be better managed.
4 BofA Global Research, “ESG Matters: Bull Market Phenomenon? Quite the Contrary,” March 25, 2020
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