Which business functions (should) speak the ESG language?

Which business functions (should) speak the ESG language?

If it is easy to identify external stakeholders in the ESG field (investors, rating agencies, banks, but also clients/customers, suppliers), it is more complicated to cluster the business functions actively involved in ESG topics. Those who speak the ESG language or that – for various reasons – can be considered ESG experts.

I am referring not only to potential internal stakeholders but to departments within companies that can express solid ESG skills and that can speak the same language as a Chief Sustainability Officer or an ESG Director, so to speak.

Procurement is definitely one of them. Especially when it comes to the green supply chain, ESG ratings of suppliers, purchases represent a solid interlocutor for issues related to E (supplier environmental certifications), S (human rights, including those of subcontractors) and G (ratings, other supplier practices or standards to follow, e.g. ISO 20400 Guidance on Sustainability Procurement).

Finance – with particular reference to the part dealing with investor relations – represents another department in which ESG issues, if not already current, should represent it immediately. But even those who deal with financial statements know that non-financial aspects tend to be increasingly incorporated into a single document – integrated financial statements – which encompasses both financial and non-financial reporting.

When it comes to regulations, Compliance should always be on the spot and ensure that the entire organization can achieve the possibility of obtaining specific certifications related to the environment (ISO 14000 family), for example or other (ISO 26000 Guidance on Social Responsibility, ISO 20121 Event Sustainability Management System, ISO 37120 Sustainable Development for Community, to name a few).

Dealing with the control system (and compliance represents the second level), Internal Audit, which instead represents the third level of control with the highest level of independence, should (and could) provide useful contributions in the ESG field, identifying areas to be audited or – at least – to be brought to the attention of the Boards of Directors or Risk Committees.

Moving towards the Operations area, undoubtedly the products (whether it is an industrial company or a service company) should contemplate ESG issues and specialists who can support the implementation of these aspects right from the conception of the products, passing through design and construction are now more necessary than ever.

And speaking of planning, we cannot fail to mention the Strategic Planning department, the one that deals with key results and objectives. Including ESG areas in the results to be achieved in the future could simplify the understanding of priorities right from the start.

If a company exists it is to finalize sales and make profits. Therefore Sales, in all phases from pre to post-sales and customer service, must intercept any ESG needs of customers and translate them into market opportunities.

Human Resources plays a fundamental role in seeking and retaining talents, communicating company values to them also externally. It is no coincidence that the new generations (Gen Z) are increasingly attentive to employers who have ESG issues at heart and choose jobs with increasing attention (see Deloitte Global Millennial and GenZ Survey). Knowing what and how to communicate ESG commitment can be a fundamental strategic lever for having the best talent on the market.

I have also mentioned communication externally. Therefore, in this list, Marketing cannot be missing, which shapes messages and contents, telling the ESG story externally. Whether it is a social presence in which you want to communicate the goals and successes in the ESG field or the preparation of ESG reports that must then be shared externally, having excellent marketing professionals (e.g. copywriters) with ESG sensitivity helps to convey the messages in the appropriate way. On the other hand, Internal Communications must internally explain the same ESG story to make all employees aware of and aware of ESG issues and how the organization intends to address them.

It should therefore not be surprising that all company departments – sooner or later – will be permeated with ESG experts who in various capacities will interact with the company function assigned to command the ESG strategy and that is dealing with ESG issues on a daily basis as it is their core business: Sustainability, Corporate Social Responsibility, Environment Social and Governance.

Is this an anticipation of how sustainability will evolve in the future for organizations, as well as the changes in the balance and internal accountabilities between functions and departments to tackle ESG topics?

Photo by Ugo Mendes Donelli on Unsplash

Giuseppe Perrone

ESG enthusiastic. Author and initiator of TwentyNOW. CSR Manager in a tech unicorn after a 10 year-experience in a big4 consulting firm. Travel lover, (former) basketball player, (current) playground basketball fighter. I love also mountain bike and running. I had the idea of creating TwentyNOW to bring out the best sustainability initiatives all over the world, coming from companies and VIPS (or rather very impacting persons in sustainability)
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