Measuring the social & governance aspects of ESG
Michelle Winters, Goby's VP of Solutions, explains some best practices for setting and tracking social and governance goals to round out your ESG efforts.
Hello everyone! Today I'd like to talk to you for a few minutes about social and governance metrics. Environmental metrics seem pretty obvious but I'm continuously being asked "how do we track, quantify, and set meaningful targets for the S and the G?"
Let's be truthful for a quick second: I truly believe that the S and the G are constantly changing, and therefore can almost always be considered uncharted territory. Social especially is really built on what's important in society right now. But let's get into some strategies on how we can go about determining what metrics targets make sense for you.
First, I think it's important to really organize this by main stakeholders. So, for example, your employees, your vendors, your supply chain, your executive team, your board, and your community.
Then within each of these stakeholders, we want to address impact for each. For example, diversity, engagement, bribery, social impact, social risks, transparency. And then from there we should think about how we want to actually track these metrics.
So many times it's based off of percentage of confirmed compliance.
So for example, has your vendor signed on to the code of conduct? Do you have a risk management committee? Do you have an anti-bribery policy in place?
Other times it's the percentage of results.
So, what percent is your leadership is involved with charitable organizations? What is the diversity percentage of your board or employees? What is the percentage of your revenue that is maybe reinvested back into the community? What percentage of your portfolio has been assessed for social risks?
These are all examples. And lastly you also want to probably evaluate actual results.
So the volunteer activity your employees, number of charitable events, how many discriminatory or health and safety complaints you're receiving and how you're evaluating executive pay.
All examples, but ultimately in the end, it kind of always goes back to that "who, what, and then how", and then you can use these as starting points to look back on an ongoing basis.
So with that I'm interested to hear what you're tracking and how you're tracking and feel free to comment below or always happy to get a virtual coffee with anyone. Thanks so much.