ESG Strategy 2

You’re probably hearing about ESG projects more often (particularly on LinkedIn) as more companies consider how they can commit to net zero targets and provide transparency around their business activities. But what is ESG, and why does your company need to implement it?

ESG is a framework of pillars - Environmental, Social and Governance - that help companies shift from current linear business practices that use profit as the key measurement of success, to a circular or closed loop business model that puts planet, people and profit (triple bottom line) on an equal footing. ESG enables companies to measure and report their impact - positive and negative - from the very heart of their organisation all the way through the supply chain to the customer. It helps business owners consider how their companies are structured, company policies, ethics, the welfare of people within their organisation and throughout the supply chain, the lifecycle of products and what happens to those products at the end of their lifecycle, the impact of their business on the local and wider community, and so on.

Since the industrial revolution, we’ve caused significant harm to the planet through extraction of the earth’s resources – fossil fuels, deforestation, industrial farming and fishing, waste and landfill etc. We don’t give a second thought to our companies’ environmental responsibilities and we’ve adopted a profit over people mentality where the welfare and happiness of staff is far down the list of importance when it comes to measuring success. Let’s be honest these measurements have rarely made the list, until now.

The ABC of ESG The ‘E’ in ESG is Environmental, or more specifically your company’s impact on the planet. To document this you’ll need to measure your company’s carbon footprint both inhouse and through your supply chain. At Jump, we’re doing this right now, it’s not easy or quick but it’s an essential starting point. You’ll need to figure out your Scope 1 emissions (directly from your business – fuel burned in company owned assets), Scope 2 emissions (indirect – purchased energy from the grid) and Scope 3 (the supply chain, which includes upstream - production and transportation of goods, and downstream - use and disposal of goods). Scopes 1 and 2 are the easier of the three to measure, Scope 3 is much trickier and is the majority of most companies’ emissions. To reach a net zero target for your business, you’ll need to measure emissions across all three Scopes.