Efficiently integrating ESG policy is like operating a well-oiled machine. Providing we have all the parts in good health, the execution of operation should be simple. However, even if this particular machine is in perfect condition, it still requires top quality operation. This is where having an ESG integration strategy team shows its value.
“When we talk about integration of ESG, it is imperative that there are people in the organization who will drive this process,” says Susanne Stormer, Vice President of Corporate Sustainability at Novo Nordisk. “The very word, integration, indicates that this is a process where ‘something new’ is being brought together with ‘something existing’. And to move away from status quo, you need someone who challenges conventional thinking.”
Without a thought leader, a company can be easily sucked into the same-old-same-old policies that, at a time, were once necessary for growth. However, time is the greatest ally to evolution, and when policies change all it takes is a little time for the business world to change around it.
“In the business world, like anywhere else, there are many assumptions of ‘how we do things,’” says Stormer. “Much of this is rooted in practices that have worked well for decades, or even generations. And so there is often some inertia, for after all: ‘if it ain’t broken, why fix it?’”
Apathetic practices are the enemy of progress, and so having someone who works well under pressure to integrate new policies is absolutely crucial to success.
“Companies who do well on ESG integration tend to be those that have experienced pressure, or even disruption, from outside forces,” says Stormer. “That is why it can be helpful to have someone in a position to ‘translate’ societal expectations and convey them in a language that management will understand, and who can also be the company voice vis-à-vis those stakeholders who articulate their expectations of the company.”
Having a strategist in the mix helps with the translation what customers and consumers want from the management of an organization when it comes to ESG integration. However, one person alone is not the key for ESG integration.
“To successfully integrate ESG, one person won’t be able to do the job,” says Stormer. “It takes top management focus and determination – founded on a recognition that doing so will make the business more sustainable, that is: better fit for the future. And it takes effective coalition-building internally.
“Getting the critical players on board is often the recipe for success. And here, too, the approach should be based on the argument that there is untapped value to be derived from managing ESG issues more effectively.”
By having a team of analysts, strategists and thought leaders, management will have an easier time understanding what value the company has, and how they can continue to increase that value.
“Analysts are smart people, and they know value when they see it. The task for the internal strategic director for ESG integration is to help uncover value creation throughout the company’s value chain and bring it forward so it can be factored into the valuation of the company,” says Stormer.
By working together, these integration teams can successfully and efficiently drive ESG practices into their organization’s standard of operation.
“The common task for all of us involved in this is to develop a common language and better metrics for valuating more than money,” Stormer continues, “and ultimately, to get these other dimensions of performance into the balance sheet.”
Stormer will be a panelist in the discussion, A New Competitive Landscape: Engaging Investors Through the Power of ESG at the ESG Integration Summit in Stockholm, Sweden this Aug. 29.