Where to Start with an ESG Strategy? A Practical Guide for Companies

Where to start?

Which topics should be prioritized?

Which metrics should you track?

How can we turn ESG commitments into concrete actions?

These are some of the main questions organizations have as they begin their ESG journey.

The good news is that an ESG strategy doesn't have to start with dozens of projects or a lengthy report.

She should start by understanding the business, its risks, its impacts, and the expectations of key stakeholders.

Based on this, the company can set priorities, establish goals, create metrics, implement controls, and monitor its progress.

In this guide, you'll learn how to get started with an ESG strategy, what steps to follow, how to set priorities, which metrics to track, and how to link ESG to risk management and corporate governance.

What is an ESG strategy?

An ESG strategy organizes goals, commitments, and actions related to these aspects environmental, social, and governance of the organization.

ESG stands for:

• Environmental: environmental issues;
• Social: social and people-related issues;
• Governance: governance, ethics, controls, and corporate responsibility.

An ESG strategy may involve topics such as:

• Climate change;
• Emissions;
• Energy consumption;
• Waste management;
• Diversity and inclusion;
• Health and safety;
• Human rights;
• Ethics;
• Anti-corruption;
• Privacy and data protection;
• Third-party management;
• Corporate governance.

But an ESG strategy does not necessarily mean addressing all of these issues at the same time.

The first step is to understand which ones are truly relevant to the organization.

Why are companies adopting ESG strategies?

ESG is no longer just an issue related to sustainability.

Environmental, social, and governance issues can directly affect:

• Reputation;
• Operations;
• Customer relations;
• Investor Relations;
• Access to business opportunities;
• Regulatory risks;
• Supply chain;
• Business continuity.

In addition, large companies and investors may require information regarding ESG practices from their partners and suppliers.

This means that ESG also becomes a matter of risk management and competitiveness.

Where should you start when developing an ESG strategy?

The most common mistake is to start with the report.

Before considering publication, communication, or metrics, the organization needs to understand its current situation.

An ESG strategy can be structured in eight steps:

1. Understand the business;
2. Identify stakeholders;
3. Identify relevant topics;
4. Assess risks and impacts;
5. Set priorities;
6. Set goals;
7. Define indicators;
8. Monitor and continuously improve.

1. Understand the business

Before defining an ESG strategy, it is important to understand how the organization operates.

Analysis:

• Industry;
• Main products and services;
• Operations;
• Location;
• Supply chain;
• Customer profiles;
• Relationships with government agencies;
• Key risks;
• Environmental and social impacts.

An industrial company, a financial institution, and a technology company will likely have different ESG priorities.

There is no one-size-fits-all ESG strategy.

2. Identify the key stakeholders

Stakeholders are interested parties who can affect or be affected by the organization's activities.

Depending on the company, they may include:

• Customers;
• Contributors;
• Investors;
• Suppliers;
• Partners;
• Regulatory agencies;
• Communities;
• Board of Directors and shareholders.

Understanding these stakeholders helps identify which ESG issues are most relevant to the business.

3. Identify the relevant ESG issues

Once the organization has a clear understanding of the business and its stakeholders, it can begin to identify the issues that warrant attention.

One practical way is to categorize the topics into the three pillars.

Environmental

• Emissions;
• Energy;
• Water;
• Waste;
• Use of natural resources;
• Environmental impacts.

Social

• Health and safety;
• Diversity;
• Inclusion;
• Human rights;
• People development;
• Labor relations;
• Impact on communities.

Governance

• Ethics;
• Compliance;
• Anti-corruption;
• Internal controls;
• Risk management;
• Privacy;
• Transparency;
• Conflicts of interest.

4. Conduct a materiality assessment

After identifying the possible topics, it is necessary to determine which ones are truly a priority.

This is where the materiality.

A materiality assessment helps an organization understand which ESG issues are most relevant given its business and its stakeholders.

Here are a few questions that might help:

• Does this issue pose a significant risk to the business?
• Could this issue have a significant impact?
• Is this a concern for stakeholders?
• Are there any related regulatory requirements?
• Could this issue affect our reputation?
• Is there a financial or operational impact?
• Does the topic influence the organization's strategy?

The goal is to prevent the company from trying to do everything at once.

Prioritization is one of the most important steps in an ESG strategy.

5. Integrate ESG into risk management

A mature ESG strategy should not operate in isolation from corporate risk management.

For each priority topic, the organization may ask:

“What risk does this issue pose to the business?”

For example:

This connection helps make ESG a matter of business management.

6. Set ESG goals

After identifying the priority topics, set clear objectives.

A goal must be specific enough to allow for monitoring.

Examples:

• Reduce the consumption of certain resources;
• Increase the participation of certain groups in the organization;
• Expand compliance training;
• Expand the evaluation of critical suppliers;
• Reduce the number of incidents of a certain type;
• Improve a specific safety indicator.

Avoid vague goals such as:

“To be a more sustainable company.”

Choose goals that can be tracked.

The clearer the objective, the easier it will be to define metrics and assign responsibilities.

7. Assign responsibilities

An ESG strategy cannot depend on a single person.

It is important to establish clear responsibilities.

The important thing is that each goal has someone responsible for monitoring its implementation.

8. Define ESG indicators

You can't properly manage what you can't track.

The indicators make it possible to assess whether the strategy is progressing.

Examples of environmental indicators

• Energy consumption;
• Water consumption;
• Emissions;
• Waste volume;
• Recycling rate.

Examples of social indicators

• Accident rate;
• Absenteeism;
• Turnover;
• Diversity;
• Training hours;
• Health and safety indicators.

Examples of governance indicators

• Compliance Training;
• Complaints received;
• Complaints addressed;
• Third parties evaluated;
• Controls tested;
• Nonconformities;
• Delayed action plans.

The indicator should be useful for decision-making, not just for filling out a report.

How to Choose the Right ESG Metrics?

A company doesn't need to track hundreds of metrics.

Start with the metrics that answer the most important questions.

For example:

• Are we reducing our main environmental impact?
• Are we improving our working conditions?
• Are we reducing compliance risks?
• Are we evaluating critical suppliers?
• Are we following through on our action plans?

Indicators should provide information to support decision-making.

Does ESG need policies and controls?

Yes.

When an ESG issue is deemed relevant, the organization may need to establish policies, processes, and controls to manage it.

For example:

This framework helps translate ESG goals into operational processes.

How do you document an ESG strategy?

An ESG strategy must be accompanied by information that demonstrates its implementation.

Depending on the topic, there may be evidence such as:

• Policies;
• Procedures;
• Reports;
• Certificates;
• Training;
• Audits;
• Metrics;
• Operational records;
• Action plans;
• Meeting minutes.

This evidence must be organized and linked to the respective objectives, controls, or requirements.

A good ESG strategy must be demonstrable.

How to Create an ESG Action Plan?

When an organization identifies a gap, it needs to determine how it will address it.

An action plan may include:

• Action;
• Objective;
• Owner;
• Due date;
• Priority;
• Status;
• Indicator;
• Proof of completion.

Example:

How can we prevent ESG from becoming just a marketing ploy?

One of the greatest risks of an ESG strategy is a discrepancy between what the company communicates and what it actually does.

To prevent this, the organization needs to connect:

Commitment → Objective → Risk → Control → Evidence → Indicator → Result

For example, if a company claims to have a strong commitment to ethics, it must be able to demonstrate:

• What policies are in place;
• What training sessions are held;
• How complaints are handled;
• How third parties are evaluated;
• What controls are in place;
• Which indicators are tracked?

This strengthens the strategy's credibility.

What is the relationship between ESG, compliance, and governance?

Governance is one of the pillars of ESG and is closely linked to compliance.

Topics such as:

• Ethics;
• Anti-corruption;
• Whistleblower channel;
• Risk management;
• Internal controls;
• Transparency;
• Privacy;
• Third-party management;

They can be part of both the ESG agenda and the GRC framework at the same time.

Therefore, companies that already have governance, risk, and compliance processes in place can use this framework as a foundation for developing their ESG strategy.

ESG and GRC: An Integrated Framework

An ESG strategy can be integrated into the GRC framework through a simple chain:

ESG Topic → Risk → Requirement → Control → Evidence → Action Plan → Indicator

This approach helps the company move away from initiative-based management and toward process-based management.

How can technology help?

One of the main challenges of an ESG strategy is the decentralization of information.

It is common to find data distributed across:

• Spreadsheets;
• Presentations;
• Documents;
• Emails;
• Different systems.

This makes it difficult to consolidate the indicators and manage the action plans.

A GRC platform can help centralize:

• Risks;
• Controls;
• Requirements;
• Evidence;
• Action plans;
• Metrics;
• Owners;
• Dashboards.

As a result, managers are able to track the progress of the ESG strategy in a more structured way.

How can Triskle support your ESG strategy?

A Triskle GRC provides a framework for centralizing processes related to Governance, Risk, and Compliance.

This framework can support the management of ESG issues by enabling the organization to:

• Risks;
• Controls;
• Requirements;
• Evidence;
• Action plans;
• Metrics;
• Monitoring;
• Executive dashboards.

This makes it possible to integrate the ESG strategy into the company's day-to-day management.

Instead of having information scattered here and there, the organization now has a structure in place to track its progress.

ESG is no longer just a list of initiatives; it has become an integral part of corporate management.

Checklist: How to Get Started with an ESG Strategy

Frequently Asked Questions About ESG Strategy

Where should you start when developing an ESG strategy?

Start by understanding the business, its impacts, risks, and stakeholders. Then, identify the relevant ESG issues, set priorities, objectives, and assign responsibilities, and establish metrics.

Does a small business need an ESG strategy?

The strategy should be commensurate with the organization’s size, industry, risks, and impacts. Smaller companies can also adopt relevant ESG practices without necessarily creating a complex structure.

What are the three pillars of ESG?

The three pillars are Environmental, Social, and Governance.

Is ESG just about sustainability?

No. ESG encompasses environmental, social, and governance issues. Therefore, it also involves topics such as ethics, compliance, risk management, transparency, and controls.

What is the relationship between ESG and GRC?

GRC can provide a framework for managing risks, controls, requirements, evidence, metrics, and action plans related to ESG objectives.

Which ESG indicators should I track?

The indicators depend on the sector and the organization’s priorities. It is best to start with the indicators that reflect the company’s key ESG impacts, risks, and objectives.

How Can You Avoid Greenwashing in an ESG Strategy?

One way to reduce this risk is to ensure that the commitments disclosed are supported by objectives, processes, indicators, and evidence that demonstrate the results achieved.

Does a GRC platform help with ESG management?

Yes. A GRC platform can centralize risks, controls, requirements, evidence, action plans, and metrics, helping to integrate ESG into corporate management.

Start a ESG strategy It doesn't mean creating dozens of projects or immediately producing a lengthy report.

The first step is to understand the company.

Next, identify relevant issues, assess risks and impacts, set priorities, and establish measurable objectives.

A mature ESG strategy must connect:

Objectives → Risks → Controls → Responsibilities → Evidence → Indicators → Results.

This framework transforms ESG into a management tool rather than just a corporate initiative.

For companies that already have a GRC framework in place, the integration may be even more seamless.

ESG doesn't have to be just another isolated process. It can be part of the organization's governance, risk, and compliance framework itself.

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