What if I told you that your stakeholder engagement efforts could help you do more than simply build stronger stakeholder relationships and secure social acceptance for your projects?
Your stakeholder engagement could also be helping to boost your ESG score – provided you have the right tools to track and articulate your environmental, social and governance efforts. Read on to see how the right tools can simultaneously improve your social acceptance, sustainability reporting, and potentially, your bottom line.
Why ESG matters for stakeholder relations and financial health
Environmental, social and governance (or ESG) criteria are a group of standards used in socially responsible investing. These standards encompass things like labor practices, community relations, product safety, data security and the like.
Examples of ESG Criteria Used by
Image source: https://www.ussif.org/sribasics
ESG ratings are used to measure of a company’s resilience to long-term, financially relevant ESG risks. Any negative or harmful actions, proactive solutions and positive actions taken by a company can impact its ESG score.
Even if a company isn’t paying close attention to its ESG practices, a growing number of stakeholders certainly are – including investors. ESG ratings are now seen as a better measure of future earnings risk or earnings-per-share volatility than traditional financial metrics such as earnings quality, leverage and profitability.
Norges Bank Investment Management, the country’s $1 trillion oil fund and the world’s largest sovereign wealth fund, recently divested from a number of Canadian oilsands companies citing their “unacceptable greenhouse gas emissions.”
– Financial Post, May 13, 2020
Basing ESG practices on the UN’s Sustainable Development Goals
A growing number of companies are embracing responsible ESG practices. In some instances, it’s due to the potential for financial gain. In others, it may be simply to improve corporate image.
Regardless of motivation, many companies are basing their environmental, social and governance practices on the UN’s Sustainable Development Goals. These 17 goals serve to create a better and more sustainable future for all by addressing global challenges including those related to poverty, inequality, climate change, environmental degradation, peace and justice
While these SDG goals are in no way mandatory, their universality resonates with stakeholders worldwide, making them a generally safe and sensible choice for most organizations regardless of industry sector. Some companies may prefer to embrace other goals. Often the choice will depend on the particular challenges encountered within the industry sector and/or the needs of the regions in which the company operates.
If ESG isn’t reported, does it count?
ESG practices are as varied as the reasons for adopting them. But the companies most likely to be rewarded with a higher ESG score (read: less exposed to social risk and more financially robust to withstand uncertainty), are those that do the best job at reporting their ESG efforts. This is where having the right tool to track and report ESG and related stakeholder efforts can make all the difference.
How to track and report ESG in Borealis software
Borealis stakeholder engagement software gives companies a single platform for recording, tracking and reporting all activities pertaining to environmental, social and governance practices:
- Community engagement
- Social and environmental performance
- Land access and management
- Public affairs and government relations
By centralizing all this data in a single platform with powerful analytics and reporting capabilities, companies can easily plan, measure and demonstrate their ESG efforts. They can just as easily link them to their chosen SDGs for sustainability reporting purposes.
SDGs are the type of high-level indicators executives and boards of directors like to use to measure efforts. Without the proper tool, however, it can be extremely difficult and time-consuming to pull together everything the field agents have been doing over the past year and make them “fit” the SDG model for including in an annual sustainability report.
In Borealis, users can easily manage tags for each social development goal the company has chosen to embrace. Each time a stakeholder action is entered into the system, it can be tagged to the appropriate SDG category with just a click. When it comes time to report on ESG, Borealis users can easily generate a variety of reports articulating all efforts according to social development goal, time period, geographic location, project, etc. Reports can be configured in virtually endless ways.
Examples of how Borealis software can help turn stakeholder engagement into a better ESG rating
If your company has embraced Gender Equality as a key social development goal, you can build and manage your social investment programs with this goal in mind. Throughout the year, as users enter all related activities and initiatives in Borealis’ Social Investment module they can be tagged to gender equality as appropriate.
You can then use a widget that lets you pull up all the data tagged for a certain category and display it in a variety of ways, depending on the specific data needs of the recipient. You can also extract indicators by gender to better report on the promotion of gender equality among beneficiaries of community development programs.
If you’re working on a large-scale extraction project, you may wish to choose Clean Water and Sanitation as one of your social development goals. With Borealis’ Grievance Management module, you can tag all related grievances from local communities to this goal.
At any moment, you can pull up a report to show local or national governments, financial lenders, shareholders or any other interested stakeholder that you have a structured and transparent process in place for handling grievances in a timely and effective manner according to industry best practices. You can also easily show them exactly what steps you have taken – whether for a given stakeholder group, time period, type of grievance, etc.
Similarly, as users enter all land compensation activities in Borealis’ Land Access & Resettlement module , they can be tagged to the associated social development goal such as Reduced Inequalities. At the end of the year, users can generate a report showing how your fair and transparent compensation processes are helping to reduce inequalities in the country where your project is based.
These are probably the three most basic examples of how you can use Borealis software to secure social acceptance from stakeholders as well as score a higher ESG rating that could increase the value of your company.
According to the IFC, “Good environmental, social, and governance practices have become a new normal in doing business, a way to support companies’ financial performance and their ability to grow and compete.”
With a powerful tool like Borealis software, companies can properly articulate how their stakeholder engagement efforts are helping to support their responsible ESG strategy. And hopefully, this will lead to a higher ESG score and a healthier bottom line.
About Borealis Software
Borealis is used globally by organizations that want to take a more efficient and systematic approach to stakeholder engagement. By providing a single platform for managing all stakeholder engagement activities, Borealis simplifies data entry, sharing and reporting, making it easier to plan, measure and report ESG performance. Borealis users benefit from a global community of practice that supports their efforts to continuously improve ESG performance as they work toward securing and maintaining stakeholder acceptance for their projects.
To learn more, contact us.