Being a business that’s a force for good – it’s part of MAYO’s mission and one we share with so many other businesses today. Efforts big and small make a difference, whether it’s collecting donations for a holiday food drive or pledging to become a carbon neutral company by 2030.
The struggle many businesses have isn’t finding ways to do good, but how to document and measure them. Creating sustainability and good governance key performance indicators (KPIs) is one way to hold your company accountable and set goals for continuous improvement. It also gives you numbers and facts you can use to talk about the good you do in an authentic way.
In this post, we’ll talk about how companies today are measuring their sustainability and good governance KPIs and ways you can do this too.
What is ESG?
Environmental, social, and governance (ESG) refers to the standards companies set to ensure they operate in a socially and environmentally conscious way. These standards include metrics and initiatives that investors can use to screen potential investments and that hold companies accountable.
Casey Snyder, partner and managing director of wealth management at The Sedoric Group of Steward Partners in Portsmouth, NH, said he’s talked to a number of clients who are interested in ESG investing.
“Rewind 40 years and doing the right thing meant taking care of your employees. The client base and community and employees were equally weighted,” said Casey Snyder, Partner and Managing Director of Wealth Management at The Sedoric Group of Steward Partners in Portsmouth, NH. “It then morphed into prioritizing shareholder value at expense of employees and the community. ESG is society’s effort to go back in time and start doing the right thing for employee clients and the community again.”
Sustainability and Good Governance by the Numbers
Snyder said investors want to see the numbers and accountability behind the ESG story, which includes how ESG ratings are created and the data used to assess positive impact.
Today’s consumers–especially younger generations–are also demanding this accountability. They do this by choosing companies that are thoughtful of people, the planet and profit. Buyers want to know the company they buy goods and services from are striving to produce less waste, lower their carbon footprint, and ensure employees are treated fairly and paid a living wage.
Some of these initiatives can include:
- Commitment to lower or get to zero net carbon emissions
- Adopting diversity, equity and inclusion policies in their business operations
- Pledging to pay all employees a living wage
- Going paperless or eliminating plastics from product packaging
- Becoming a Certified B Corp
How to Quantify Doing Good?
It can be hard to quantify the good work you do as a company. Some actions may be done without documentation, and instead are seen as doing the right thing in the course of a business day.
When it comes to marketing, however, it’s essential to have metrics and documented policies to avoid the appearance of greenwashing. Unfortunately, some companies today seek to leverage the consumer appeal of ESG without fully doing the work. By keeping records of volunteer hours, dollars donated, wage and professional development policies, waste reduction and other efforts, your good works will be more authentic.
How MAYO Quantified its Impact
In 2022, MAYO became a Certified B Corp. As part of that process, we undertook the B Corp Impact Assessment, which examines how companies do business and areas where they strive to do good. It’s a way to measure positive actions and create a framework for accountability.
In that process, MAYO documented aspects of our business in five areas:
Here are some of the items in these impact areas we were asked to document and examine:
- Paid family leave policy
- Number of paid days off
- Pay compared to living wage
- How we track diversity in the workplace
- Percent of revenue donated annually
- Total energy use
- Renewable energy use
- GHG emissions offset
- Flow of capital
Where to Begin
Once you decide to track your sustainability and good governance KPIs, the next step is figuring out how. Here are a few tips to get you started:
- Create a list of the KPIs you will track
- Decide how these will be measured, as in annual dollars donated or how much fuel is purchased monthly.
- Create a central location, such as a spreadsheet or file, where KPIs can be recorded and accompanying documentation can be stored.
- Take a baseline measurement you can use to compare your progress year-over-year.
- Note the highlights. If you’ve done well reducing waste or creating an inclusive work environment, share with your customers in an email or social media post.
As you review your KPIs, make sure to consider all aspects of your business, including managing relationships with suppliers, customers, and your community, or your company’s leadership, executive pay, audits, and internal controls.
If the level of detail has your company overwhelmed, that’s OK too. Start small with a few KPIs woven into your annual goals. While many issues seem urgent, moving toward a more sustainable and just way of doing business is an ongoing journey.