If you are wanting to grow your business in the new normal, then take Wayne Gretzky’s advice, “skate to where the puck is going”. For business, the puck is rocketing toward sustainability and ESG (environmental, social, governance) conscious businesses. You can use ESG to grow if your business has embraced and lives the ESG conscious business values and principles. ESG is the key to attracting money, clients, the best talent and to earning a social license to grow in the new normal. You can also use it to differentiate your business so it stands out like a shiny penny (that gets picked up) in overcrowded, commoditized markets.
With the media focus on climate and COP26, it seems like all you hear about is the environmental aspect of ESG. Environmental initiatives are the baseline where people are expecting to see change from all businesses. There is a similarly large need and opportunity for businesses to act on their Social Responsibility to be leaders in creating a sustainable world. To do it, you need to take social responsibility out of the board room, and make it real and relevant from top to bottom and back up again in your organization. Using the 4 points outlined below, you can use the social component of ESG to grow your business by consciously embedding social responsibility into the DNA of your business.
1) ALL STAKEHOLDERS - The ultimate challenge of ESG is how you can embed it in the everyday behaviours and choices of all of your people. This isn’t just a senior leadership responsibility. In fact, the truth of how Socially effective you are, as an organization, is demonstrated in how you interact every day, in every way, at every level, with all of your stakeholders. It is your behaviours that speak the truth. It starts with your own people, who in turn will apply it to customers, suppliers, shareholders, the public, governments, First Nations and environmental interests. These are the baseline of stakeholders all Canadian businesses must consider.
2) WIN-WIN-WIN PHILOSOPHY - Truly owning and living the ESG values is as simple as consciously pursuing win-win-win solutions in all of your dealings with all of your stakeholders. In every interaction, do a reality check. Ask yourself if the situation is trending toward win-lose, or win-win, then adjust accordingly. Further, in most situations the choices you make affects more than one stakeholder, so ask who else is affected? Consider them as well and then you are working to a win-win-win solution. I believe that we have a competitive advantage as Canadians, given that this collaborative, win-win-win philosophy is endemic in our culture.
3) MINDFUL CONVERSATIONS – Engaging in a win-win-win dialogue typically requires you approach it in a different way. Being mindful of the win-win-win objective, and applying crucial conversation methodologies will set you up for much better socially responsible solutions. Start conversations recognizing your biases based on your own goals, hold those in check and start off with the single goal of understanding what needs define a win by the other stakeholders. Until you truly understand them, you cannot expect them to understand or care about your needs or goals. Once you have achieved mutual understanding, the next phase is looking for points of alignment, common goals or co-destiny wins. Moving the discussion to achieve some quick wins will prove out your genuine good intentions. Be patient and allow time to build trust, then tackle the harder issues over time, recognizing that win-win takes a lot more effort and creativity but successful outcomes in socially mutual wins are actually sustainable.
4) ANCHORING EFFECTIVE BEHAVIOURS – The last, and culturally most crucial step, is to stop, recognize and celebrate your social successes, and learn from your mistakes. Your culture is simply the pattern of behaviours you tolerate, and most importantly those you don’t tolerate within your organization. In the words of John Jones, “what gets measured gets done, what gets fed back gets done well, what gets rewarded gets repeated”. This is the function of ESG data collection, monitoring, analysis and reporting. Recording your environmental, social and governance wins, the lessons learned, rewarding the right behaviors and not tolerating the wrong, is the key to driving your ESG cultural transformation. The job is not finished until you’ve collected the stories and shared them, not as bragging, but as a role model to others. To grow a sustainable society, as a leader you must own your ESG responsibility, and be a role model challenging others to do the same, then your stories and your efforts will build your ESG brand, growing exponential value over time.
Success per social responsibility is a journey, not a destination, you never truly get there, as every interaction with your stakeholders is either enhancing or degrading your reputation. Regardless, these simple steps if applied consistently, with discipline, can position you as an ESG conscious business leader and trusted partner with all of your stakeholders. Your stakeholders are the key to your ESG success as they want to make sure your shared win-win-win goals are achieved. It is when your stakeholders sing your praises, they create the positive ESG brand and reputation you want, much more credibly than you could ever do for yourself.
Regardless, disruption is the new normal. You can embrace it as an opportunity or be its victim. Consider you are living in an ocean of change. You can’t control the waves, but you can learn to surf. Proving your team’s ability to surf by seeing the ESG waves coming and adapting quickly will enable you to grow and thrive as a sustainable and prosperous business in the new normal of disruptive change.
If these ideas aren’t a part of your strategic growth planning & execution, then this is your call to action to embrace ESG, or you may find it hard to attract investors, customers, employees, partners and ultimately ensure your continued success in these disruptive times.