In 2019, Environmental Social Governance (ESG) was simply a business buzzword, referring to a company’s commitment to do more than making a profit but to also have an impact on the environment, social causes, and corporate conduct. Fast forward to 2021 and ESG carries significantly more weight: it’s an action plan that companies of every size and location are adopting to ensure the sustainability of the planet as well as their own brands. Here’s a little backstory.
In September 2020, the World Economic Forum (WEF) published a report called Measuring Stakeholder Capitalism Towards Common Metrics and Consistent Reporting of Sustainable Value Creation that quite effectively delineated what ESG is and how to measure impact through universal metrics. The purpose of the report was to encourage businesses to inform stakeholders of non-financial contributions in four key areas or pillars: principles of governance, planet, people, and prosperity.
The report and its recommendations weren’t pulled out of thin air. In fact, the WEF relied heavily on the United Nations’ Sustainable Development Goals originally set forth in 2015 and adopted by 193 countries. The cornerstone of the United Nation’s plan is to end extreme poverty, reduce inequality and protect the planet by 2030. WEF basically created a “2.0 version” for corporations after conducting six months of interviews with some 200 companies and investors.
So what exactly do these metrics address? Here are some examples. Under the planet pillar, there are metrics for reporting greenhouse gas emissions, water consumption. and single-use plastics. Under the people pillar, metrics include numbers on diversity and inclusion, a pay equality ratio, and employee well-being rates. The prosperity pillar involves economic contribution and total tax paid, while the governance pillar includes information on anti-corruption initiatives.
Finally, ESG reporting defined in a way business can wrap its collective heads and arms around!
And, apparently, leaders of the world’s largest multinationals agreed. For at the WEF’s annual gathering Davos, Switzerland, in January—which many attended virtually due to the pandemic—more than 60 global companies announced they’d signed onto a commitment to follow this common set of ESG goals. Some of those on the list include Bank of America, Siemens, PayPal, Heineken, Deloitte, Sony, Unilever, Dell, and Royal Dutch Shell.
Putting ESG into Action on the Environment
Pledging to commit to ESG and reporting on one’s results is one thing, putting ESG into action is another. For some companies, this new set of responsibilities can be daunting. This is where the old adage of “eating the elephant one bite at a time” is sage advice. Instead of plunging in headfirst, companies are better served identifying one or more areas to focus on, identifying goals and action items, and then reporting on them. Then, build on success by adding new areas of focus.
- Climate change
- Solid waste
- Resource availability (reuse of non-renewable resources)
- Nature loss
- Freshwater availability
- Air pollution
- Water pollution
While these all seem to be “elephants” in their own right, RM2 and its reusable pallets can help companies with very clearly defined and ultimately reportable “bites” that are relatable to shareholders and consumers.
Resource availability addresses the reuse of non-renewable resources to advance a circular economy. Companies are urged to report the most appropriate resource circularity metric(s) for the whole company and/or at a product, material, or site level as applicable.
Reusable pooled pallets like RM2’s BLOCKPal pallets were made for this ESG metric. First, BLOCKPal is a pooled pallet solution with pallets designed for multiple uses. Second, BLOCKPal pallets have a useful life of more than 150 trips—more than 500% longer than the best-case assumptions for pooled wood pallets and over 50% longer than pooled plastic pallets. This longevity is due to the rugged fiberglass composite construction, which makes RM2’s pallets exceptionally durable even in the most challenging supply chains.