The first rule of effective management is setting attainable targets. When it comes to sustainable development, this may seem like a daunting task, as it involves the long-term success of your organisation. However, the future of your company may depend on this small change in your current strategy.
What Is ESG?
Simply put, ESG is governance that takes into consideration Environmental, Social and Governance concerns. In the current day, this is becoming more important than ever as the impact of the climate crisis becomes increasingly apparent.
Shareholders expect their managers to invest in a sustainable future, so they can ensure a stable long-term investment. Funds are more readily available for organisations that effectively measure and report their ESG performance.
What Are KPIS?
KPIs, or Key Performance Indicators, are a means of assessing your performance over time. They are more important than general performance metrics, as they show what your priorities are as an organisation.
Which KPIs Are Important For ESG?
The KPIs that will work for you will depend on the nature of your organisation. Of course, this is true for any targets. If you’re a paper manufacturer, you will likely have different waste paper goals than an airline. As a result, your risk management for ESG concerns must be unique to the nature of your company.
First of all, you need to assess your core values and which targets will help you to achieve them. Often ESG is associated with environmental concerns, but the social impact and governance focus are equally important. Make sure to treat each equally.
We’ve put together a few examples that might inspire you when thinking of your own:
- What are your air emissions, including greenhouse gases?
- What energy sources do you use?
- How much water do you use?
- How much material waste is produced?
- How diverse is your company?
- How do you engage with the local community?
- How do you perform on human rights assessments?
- What health and safety measures does your organisation have in place?
- How is your Board of Directors composed?
- How are audits dealt with?
- What security measures do you have in place?
What Makes A Good KPI?
The best KPIs should inspire your team to achieve their goals, which means they should be actionable and precise. When deciding which KPIs to measure, ask yourself the following questions:
- Are your KPIs specific and quantifiable?
- Are your KPIs metrics that can be influenced through action?
- Do you have the appropriate time and resources to dedicate to these KPIs?
Sometimes, companies will measure KPIs because they feel they have to. They will pick KPIs that are easy to measure, rather than ones that are genuinely useful. Don’t just follow what everyone else is doing! Make sure you tailor your KPIs to your organisation. After all, you want to be better than your competitors, not exactly the same.
ESG KPIs For Housing Associations:
Some sectors such as the Social Housing sector have specific KPIs. For the Housing Industry, the most notable set of KPIs is the Sustainability Reporting Standard. In this document, the ESG Social Housing Working Group set out the sector-specific ESG KPIs for Housing. If you would like to learn more about this, please read our article here.
How To Effectively Utilise KPIs:
The most important thing about KPIs is that they are used as a starting point for change and ESG initiatives. It is no use having a KPI that only one person in the organisation knows about. They must be built into the DNA of your organisation.
A Board Portal like Convene can help you share your findings quickly and efficiently. At every stage of the meeting process, our software is designed to enhance communication. We are a paperless solution, which means you don’t have to print off numerous Board packs.
Alongside this, we've been working on our own ESG reporting tool, so you can measure your ESG performance. A comprehensive ESG report is essential to sustainable governance and we can help simplify the process. All you need to do is input your relevant data and Convene ESG will create a Word document with all information correctly formatted.
We are currently collaborating with a number of existing Convene housing customers as part of our early adopters programme. Through their valuable feedback, we will continue to develop and refine our platform, delivering a robust end-to-end ESG experience. The software has been recently updated to reflect the changes to the SRS.