In today’s increasingly complex society, it has become critically important for an organization to engage in effective ways with growing ESG (Environmental, Social and Governance) responsibilities.
Developing strategies and action plans to incorporate the principles and practical issues of ESG has become a central business imperative for enterprises worldwide. This is especially true considering the need to respond to growing pressure to enact serious decarbonization efforts.
Today the world faces massive and ongoing systemic change due to climate change. To geopolitical tensions, financial pressures and the demands of growing populations for safe and responsible infrastructure operations. In this context, organizations face heightened scrutiny from stakeholders. This includes investors, customers, employees, and regulatory bodies.
Prioritizing sustainability is no longer just a moral obligation
It’s a strategic necessity. Sophie Boisvert, Vice-President of Resources and Industries at Norda Stelo, underlines the importance in the following statement:
«The topic of ESG (Environmental, Social, and Governance) and decarbonization is becoming increasingly relevant for businesses, and there are several reasons for this.
First and foremost, companies, especially factories, often act as significant greenhouse gas emitters, subjecting them to mounting pressure. This pressure comes from various sources, including a more environmentally conscious public that is increasingly aware of the impact of emissions on climate change.
Furthermore, government policies and regulations are becoming stricter regarding greenhouse gas emissions. Adding to the necessity for companies to take action to reduce their carbon footprint and address environmental concerns».
As a result of the increased visibility of climate-change issues and how organizations respond to public, stakeholder and regulatory pressures, there are now several key strategic reasons for developing a comprehensive ESG and decarbonization strategy.
1. – Stakeholder Expectations and Reputation Management
In an era of heightened transparency and social activism, stakeholders expect organizations to demonstrate a commitment to responsible business practices. Implementing initiatives that demonstrate this commitment helps organizations align more closely with the values of their customers, investors, employees, and communities. Fostering trust and credibility through transparent reporting and sustainable actions can enhance brand reputation and help gain a competitive edge in the market.
2. – Regulatory Compliance and License to Operate
Governments worldwide are enacting stringent regulations to address environmental and social challenges. They range from carbon emissions targets to human rights standards. Organizations with proactive responses can stay ahead of regulatory requirements. They can minimize compliance risks and avoid costly fines or legal repercussions. Demonstrating a commitment to sustainability reinforces an organization’s social license to operate. It also fosters positive relationships with regulators, policymakers, and local communities.
3. – Long-term Resilience and Risk Mitigation
Long-term strategies that feature responsible business practices help develop an organization’s resilience in the face of evolving environmental and social challenges. By proactively addressing environmental risks, such as climate change and resource scarcity, and social risks, including labor practices and diversity, organizations can mitigate potential disruptions to their operations and supply chains. In addition, integrating sustainability practices can shield organizations from regulatory penalties. And also damage to their public profile and reputation. Thus safeguarding long-term value creation.
4. – Access to Capital and Investment Opportunities
Investors are increasingly incorporating ESG factors into their decision-making processes. They recognize the material impact of sustainability on financial performance and risk management. Organizations that prioritize sustainability principles stand to attract a broader pool of responsible investors. Thus accessing capital more efficiently and with favourable terms. In addition, integrating sustainability metrics into financial reporting can unlock new investment opportunities. Such as green bonds and impact investing funds, further fueling growth and innovation.
5. – Innovation and operational efficiency in ESG
Embracing environmental, social and governance objectives and decarbonization initiatives drives innovation and fosters operational efficiency within enterprises. By investing in renewable energy, energy efficiency measures, and sustainable technologies, organizations can reduce their carbon footprint. And simultaneously cut costs and improve resource utilization. Furthermore, adopting sustainable practices encourages a culture of continuous improvement. It also fosters collaboration across departments, leading to innovative solutions that drive business success.
In practical terms, paying much closer attention to these issues involves the coordinated efforts of people working on the front lines of any given organization. For existing operations, where all aspects of often-aging assets and the associated challenges are well known, being on the front lines means having the ability to proactively identify ideas and opportunities that might have otherwise unrealized benefits, or at least sooner. Whether it is static infrastructure like roads, bridges, buildings, wharfs, or tanks. Or process equipment such as engines, turbines, boilers, mills, kilns, and mobile fleets, engineering firms can seek and drive new efficiencies. They can present new technology solutions for more rapid integration or avoid upsets and associated impacts.
6. – Impact and Performance in a Complex Era
Avoiding early replacement of aging assets while increasing their levels of performance can of course be a win-win. Norda Stelo and the Stelar digital platform focus on the application of customizable digital solutions. Solutions to deliver predictive maintenance and asset reliability in order to extend the performance and life of assets. This capability, integrated with the process and platform for digitally connecting assets within a facility (IoT) and incorporating all environmental (and qualitative social, to the extent possible) data marks an important advance in responding to an organization’s central sustainability issues.
As noted by Matt McCulloch, Director of ESG and Decarbonization at Norda Stelo:
«Today many organizations are in the process of transitioning to being more purpose-driven while publicly stating their ESG-related commitments, goals, and achievements. The purpose and commitments include goals related to the impact the firm wants to make through the services it provides. Indeed, increasingly to be competitive in today’s complex conditions an organization must demonstrate the broader ESG impact it has in delivering its products or service. This is a requirement of being a B Corp, a commitment and designation Norda has recently achieved».
Demonstrating such impact is no longer an option. It is a strategic imperative for enterprises seeking to thrive in a rapidly changing world. Using these principles and strategies results in creating an ecosystem of information in which data, resources and asset performance can be managed more intelligently with a focus on reducing environmental impacts and augmenting sustainability.
Thus, businesses can enhance their resilience, meet stakeholder expectations, access capital, drive innovation, and ensure regulatory compliance. Towards a more sustainable future, adopting ESG and decarbonization principles and practices will not only safeguard business success but also contribute to a more prosperous and equitable society.
ESG: in conclusion
Your organization has not already done so? It is imperative to begin developing a comprehensive strategy towards sustainability and resilience. And then take the steps to put it into action. To find out more about how to do that, give us a call at Norda Stelo. We can discuss how to get your plans and action underway.