The Hidden Costs of a Poorly Implemented ESG Strategy

For many leaders, ESG feels like a black box.

The organization has invested in a Materiality Matrix. We’ve identified a path forward, hired an ESG leader (or two!), and allocated a significant portion of your budget to begin implementing sustainability efforts.
Now what?

Unfortunately, too many organizations get stuck at this step.

Too many times I’ve seen organizations not fully realize the work they have put on the ESG leader’s shoulders, and they’re not providing enough support for this person to succeed.

The one person they put in charge of these efforts doesn’t have enough time or energy to lead the entire business through a change management effort, which risks putting this person (and the work done up to this point at risk.)

Why is it important to ensure your organization is providing all of the resources and support necessary to implement sustainability efforts across the organization?

Because the costs of not doing so are many.

Risk 1. Missed Objectives and Goals: Confused actions return misdirected efforts, disenfranchising investors.

Risk 2. Decreased Productivity: (possibly) worse than misdirected efforts are NO efforts. Failing to effectively manage the change towards sustainability can disempower employees, wasting time and increasing turnover costs.

Risk 3. Reputation Damage: If the lack of alignment affects the organization's ability to meet its brand promises, it can erode consumer trust.

Risk 4. Poor Decision-Making: Without the ongoing support necessary to handle daily decisions, the individuals doing this work may make the wrong choices, leading to wasted financial resources.

For decades, ESG and sustainability efforts have been thought of as ‘fluffy nice-to-haves.” Now, investor, consumer, regulatory, and community pressures are making sustainability a strategic priority.

And the costs of failure are real.