What Makes a Sound Sustainability Policy
WHAT MAKES A SOUND SUSTAINABILITY POLICY
A sustainability policy can be an excellent starting point to embed the sustainability mindset within an organisation, and to more formally demonstrate your company’s commitment to sustainable practices. There are a few key factors to consider when establishing your sustainability policy, to ensure that the policy has focus and provides value.
Firstly, to ensure correct focus, a sustainability policy should address all three non-financial facets of sustainability – Environmental, Social, and Governance (“ESG”). Relatively equivalent focus on each of these three pillars ensures a balanced sustainability policy. While all companies can include support of more general sustainability issues, such as greenhouse gas emissions, fair wages, and transparent reporting practices, specific areas of focus will depend on your company’s unique business operations. Consider including relevant and topical issues for your industry, such as biodiversity protection for those in the palm oil industry, or human rights and labour practices for those in the manufacturing sector.
The Board of Directors sets the tone for sustainability from the top, and they should be proactive and engaged with policy development. The second key element of a strong sustainability policy is official Board endorsement. The Board should also commit, via the policy, to reviewing and managing ESG-related risks and opportunities for the company on a regular basis – not simply as an annual reporting exercise.
Third, consider publishing your sustainability policy publicly, via your corporate website or company social media. While this is not yet a regulatory requirement, it can be an excellent tool to demonstrate your commitment to good ESG practices to your wider stakeholders.
Finally, while it is admirable to make your sustainability policy ambitious, it is also important to keep in mind what your company can realistically achieve. Overcommitment with your sustainability policy is simply setting yourself up for failure. Keep your policy commitments straightforward and achievable.
With these key attributes in mind, your team will be able to establish a comprehensive and focused sustainability policy – the backbone to enacting your company’s ESG ambitions.