Here at KRM22, we see ourselves as part of a local and global community. We recognise that being a modern business means taking responsibility for the world we live in, and with this in mind, we are celebrating World Environment Day this Sunday, June 5th.
The environment is not something we can only address once a year, it needs to be part of the DNA of society, be that as individuals, communities, companies, or governments. We all have a responsibility to keep this one planet as cool as we can, and we can all contribute to however small the amount. As such, each company needs to have an ESG framework, and this blog is an insight into ours.
Why Do We Need ESG?
A good ESG framework is not a predefined set of tick boxes. It is a methodology for assessing a company’s attitudes towards environmental, social and governance factors. Anybody should be able to look at the framework and get an insight into the company’s core culture and values. In an increasingly value driven world, this is an indicator to investors, employees, and customers as to who they want to work with. Once defined, the model allows the relatively simple assessment of three key questions about any organisations:
1. Is the model sustainable?
2. How are operations managed to avoid negative impacts?
3. Is the company ethical and trustworthy?
When looked at through these lenses, companies avoid “greenwashing” and develop policies that reflect how they do business.
Establishing the framework
With any large initiative, knowing where to start is often the most daunting part. The UN defines 17 sustainable development goals and each of these has multiple targets. Trying to contribute to every single one of them is beyond almost all organisations. So, how do you eat the elephant? One bite at a time.
At KRM22, we are taking a five-step approach to ESG.
1. Assess what is important to our stakeholders
We look at all of our stakeholders and establish what they care about. Our customers and suppliers are looking for ethical, sustainable firms run according to modern governance principles. This second theme is echoed by our investors as a priority. Meanwhile, our team and prospective employees want to work with a diverse group and need to have job mobility and security. Finally the wider community wants to see we are protecting jobs and the environment.
2. Focus on what is essential
Once we establish what is important, we filter these down into areas we can have the most impact on. KRM22 is a young fintech, and along with other similar companies we are not a major consumer of natural capital. We can exert most influence by choosing ethical suppliers who are not responsible for mining or pollution. Similarly, we use little water, and since the pandemic have not been flying. Perhaps our biggest impact is how our team travel to work, and to support that we promote active travel with schemes such as bike to work.
3. Highlight how the disclosures meet the SDGs
The simplest part of the framework is to tie the material elements into the Sustainable Development Goals. Eliminating those which the company can only have a minor effect on makes the whole programme more understandable. KRM22 has identified five SDGs to focus on:
1. Good Health and Well being
2. Gender Equality
3. Decent work and economic growth
4. Reduced Inequalities
5. Sustainable cities and communities
These are the areas we can have the most impact in, and they will be different for each company.
4. Collate the data
No organization can run on feel alone, data increasingly backs every decision. We have started to leverage our own Risk Cockpit to measure our current levels foreach of our targets. This helps us to identify initiatives to undertake to meet our objectives, and to tie them into our company strategy. The Risk Cockpit allows each initiative to have a number of risks and measures associated with it, and to track historic performance against those metrics. If you wish to find out more about how the risk cockpit can help you manage your ESG programme, please contact Andrew Smart
5. Establish the annual cadence
Perhaps the most important part of any ESG framework is to recognise there is no end state. Sustainability is, by nature, an ongoing process. Getting buy-in from the whole organisation to be constantly testing, reviewing and adjusting the elements is the only way to ensure that the company is on a journey.
Opening the Conversation
We recognise that the changes required cannot be undertaken by one organisation alone. If you have any thoughts as to how we can work together for the benefit of the environment, contact us via LinkedIn, our website, or our sales representatives. www.krm22.com