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The ESG revolution: here’s everything you need to know (and have to do)

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In the ever-evolving landscape of corporate responsibility, one thing has become abundantly clear: ESG (Environmental, Social, and Governance) is not a fleeting trend. Unlike some other corporate buzzwords that have come and gone, ESG has not only gained substantial momentum but has become a global must-have. Nations worldwide, from the EU and the US to New Zealand and Fiji, now recognize the significance of ESG and have started to enshrine ESG requirements into legislation. Australia has recently announced it will adopt international sustainability standards too. This seismic shift highlights that ESG is no longer optional; it has transformed into a fundamental expectation of business operations. 

“If you do ESG well, and do it authentically, it’s just good business.” – Josh Geelan, Partner at KPMG

It’s not a new concept

While ESG is a relatively new acronym, it isn’t a new idea. What’s changed in recent years is the shift from shareholder to stakeholder capitalism. Traditionally, organizations have focused on reporting to their shareholders with financial metrics like profit and growth. Stakeholder capitalism introduces a more holistic approach and broadens the perspective to include not only shareholders but other stakeholders, including employees, regulators, communities, and consumers. This expanded viewpoint recognizes the diverse views and concerns of these stakeholders and the imperative for businesses to consider their broader social impact.

Three ways you can get the S in ESG right: 

1. Focus on diversity and inclusion

Organizations that prioritize D&I initiatives are much better positioned to attract and retain top talent, which ultimately helps to drive long-term growth and sustainability. At Coca-Cola Europacific Partners (CCEP), inclusion is at the heart of their ESG strategy. They’ve recognized that to attract and retain the best talent, they need to create an inclusive environment where everyone can feel a sense of belonging and thrive.  Informed by their people who told them what matters most, CCEP has defined five key pillars around culture, gender, disability, LGBTQIA+, and multi-generational inclusivity and has set actions and campaigns around each of these pillars. As part of this, each pillar has a catalyst group that drives what is important to that cohort and what activities need to be prioritized.  

“Sustainability and inclusion is at the heart of everything that we do. It’s part of our short term strategies. It’s part of our long term strategies. It’s really everything that we want to do for our people, our customers, our communities…” – Nicole Main, OD Partner, CCEP

2. Ensure that gender equity is a priority

With compliance coming, many Australian organizations are now seeing ESG from an employee value proposition perspective, and rightly so. With the tight labour market, you need to stand out if you want to attract and retain the best talent. And to set yourself apart,  you need to ensure everyone – especially women who face greater barriers – can succeed. With a traditionally male-dominated workforce, CCEP has really prioritized their efforts in creating better gender equity. They ran a series of “gender listening groups” where they asked their people about the challenges they were facing, and from this, devised a list of actions and interventions that specifically targeted women.  This included early career interventions and targeted talent programs. After a few years, they’re now seeing the impact of this targeted approach, with nearly 50% women on their leadership team.

“This is no longer a maybe or a nice to have, this is an absolute priority for us. We know to attract and retain the best people, we need to get good at this. And we want to be an industry leader in this and have a competitive advantage with our gender equity.” – Nicole Main, OD Partner, CCEP

3. Make measurement and accountability matter

A critical aspect of any successful ESG strategy is setting and tracking targets. This ensures that initiatives are not just words on paper but tangible actions with measurable outcomes. For CCEP, this includes setting ambitious targets and then regularly tracking them through metrics and scorecards.  For example, they’ve set a target of 45% of their management positions to be women by 2030 and a third of their workforce to be women by 2030. For a heavily male-dominated industry, these goals are lofty, but CCEP has put all the mechanisms in place to make them a reality. Part of their measurement approach is to set long-term goals but track them on a monthly basis to ensure they can identify the gaps and address them straight away. CCEP also reports to different agencies like the Workplace Gender Equity Agency and uses their partnership with Circle In as part of this reporting.

“You can’t do this stuff half-heartedly. If you’ve got measurements in place, track them each month, and if things aren’t on track, ask yourself, how can you get back on track? – Nicole Main, OD Partner, CCEP

How do you get your ESG started?

Josh’s top tip: It’s never the right time, but now is actually the time to start. So whatever you do – start the journey. No one is expecting you to be perfect today or tomorrow. But they are expecting you to commit to a journey of progress and improvement. 

Nicole’s top tip: Don’t sit back and wait for big budgets or big campaigns; it’s the small things everyone does every day that can really make a difference.

Catch up on the full recording “Spotlight on the “S” in ESG: Learn how to become a socially responsible workplace with Coca-Cola Europacific Partners and KPMG” here.

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