Turn Your Organization’s ESG Goals into Action11 Aug 2022
There’s nothing like a crisis to focus the mind. That may be why two-thirds of the executives in a recent GlobalData survey said that COVID-19 acted as a catalyst for their increased focus on environmental, social and governance (ESG) matters. The pandemic, of course, also coincided with several extreme weather events—likely caused or exacerbated by climate change—and rising unrest over social justice issues.
The ESG picture, however, isn’t all bright. The GlobalData survey also found that “inadequate governance practices make it more likely that companies will fail to meet ESG goals,” while only 28 percent of executives in a PwC Consumer Intelligence Survey stood out as ESG trendsetters. And 70 percent of respondents in a Deloitte report said they had yet to even determine how climate change would affect their companies.
We have, in other words, an intention-action gap—a divergence between what we say we’d like to do and what we actually do.
A desire to close this intention-action gap is the motivation behind a new PMI report: “The ESG Imperative: Turning Words into Action.” The report takes a deep dive into the ESG movement in 2022, looking at relevant third-party research, recent regulatory changes and insights provided by ESG project leaders who are working to turn words into action and intent into impact.
In tandem with releasing this report, PMI also hosted a 28 June virtual panel discussion entitled: “PMI’s Social Impact Panel Discussion: What is Your Sustainability Quotient?” Moderated by Jennifer Tharp, Chair, PMI Board of Directors, the panel explored what sustainability means, successful sustainable business plans and how to build a more sustainable future.
The new attention to ESG is driven in part by regulatory requirements. Climate disclosures became mandatory last year for publicly listed companies in the U.K., Japan, New Zealand, and Singapore. And the U.S. Securities and Exchange Commission has issued a proposal to standardize climate-related reporting that could take effect in 2024.
At PMI, we believe that project professionals will play a critical role in helping organizations turn their ESG commitments into action. Companies, after all, rely on projects to fulfill their ESG missions. And many project professionals are already supporting their organizations in making their ESG goals a reality.
PMI stands ready to help—as an actor and enabler, offering a portfolio of tools, skills, insights and trainings that help changemakers embed ESG concepts into their projects and make ESG strategy execution easier.
To this end, we’ve recently forged an alliance with Green Project Management (GPM), a social enterprise helping to drive sustainable and regenerative development practices. The partnership will introduce the PMI community to GPM’s industry-leading models and deep expertise in advancing sustainability through innovative practices in project management.
PMI has also been at the forefront of several initiatives to support our mission as a for-purpose organization. Empowering people to turn ideas into reality is at the center of our PMI Impact Strategy. And we’re deeply committed to the United Nations’ Sustainable Development Goals (SDGs). Indeed, in 2021, the PMI community surpassed our goal of 100,000 hours of service pledged to advance the SDGs through our Hours for Impact Initiative.
What can project leaders and their teams do to move beyond good intentions and deliver meaningful change? The ESG Imperative report makes three recommendations:
Set Standards with Urgency
The first step involves audits and assessments to identify ESG gaps and opportunities. This will help determine your strategic approach and set the direction for future actions. Your ESG mission should align with and reinforce the organization’s overall strategic vision and should actively engage sponsors and senior leaders.
And don’t forget external stakeholders. It’s essential to establish feedback loops with the customers and communities affected by your programs. It’s also important to integrate process and documentation into your ESG mission to keep ESG values and goals top of mind for project teams and the entire organization.
Establish Long-Term ROI
Align your ESG frameworks with clear performance metrics. Tracking progress on specific ESG goals—such as reducing water usage or eliminating waste—is a given. But you should also assess how each initiative helps the organization on both internal and external metrics. In a recent NTT survey, for example, respondents ranked higher profitability as a top benefit of a company’s sustainability strategy.
The ROI of a successful ESG strategy, however, often goes beyond the bottom line. Organizations also realize returns linked to innovation, teamwork, reputation and the ability to attract and retain talent. To cite just two examples: More than a quarter of millennials and Gen Zers in the Deloitte report said their buying decisions are influenced by a company’s environmental initiatives. And SHRM’s 2021-2022 workplace study found that organizations with ineffective diversity, equity and inclusion (DEI) practices were 32 percent more likely to have climbing resignation rates.
Develop and Empower Changemakers
Organizations revving up their ESG commitments, however, will need to address a growing talent challenge: Demand for green jobs will outstrip supply for at least the next five years, according to a recent LinkedIn global report. Project professionals will need to hone their ESG capabilities to keep pace, while organizations will want to commit to greater upskilling and reskilling of their employees.
What skills will be in greatest demand? Technical skills are always important, especially having a baseline understanding of data analysis—essential in mapping out risks and prioritizing the right ESG initiatives. But power skills also enter the picture, including creative problem-solving, critical thinking, empathy and communication—to engage and influence an ever-widening circle of stakeholders.
PMI’s partnership will Green Project Management will aid in this upskilling challenge. We also launched PMI’s first resource hub where we house research reports, FAQs and other thought leadership content on ESG issues.
All this work is very close to my heart given my role as a director on the Global Compact USA board. But it also speaks to the value of project professionals in today’s society. They are the ones people rely upon to get things done. How much more valuable and fulfilling will our work be as we increasingly undertake projects where business and social goals are linked? Project professionals hold the key to bridging the intention-action gap—to turning society’s dreams into reality.