Let’s make a shift toward a greener and more sustainable business future.
The United States pledged a Net Zero emission target by 2050, and the Environmental, Social and Governance Score (ESG) is part of that plan. ESG is similar to a credit score that measures a company’s exposure to long-term environmental, social and governance risks often overlooked during traditional financial analysis. The goal is that ESG will help unlock competitive value by acknowledging the importance of adapting to changing socio-economic and environmental conditions to identify better strategic opportunities and challenges.
Requirements for the ESG program are rapidly expanding. Currently, reporting is voluntary but will soon be required, starting with publicly traded companies. Businesses must adhere to federal and state regulations, and reporting requirements are coming in 2024. On top of those requirements, banks, investors and insurance companies are already starting to require these metrics.
What does this mean for business owners and upcoming entrepreneurs? It means we need to start now by being proactive in adjusting to the coming changes and learning to be good stewards of Earth.
Sustainable business models are entirely different from regular business models. You don’t just look at the company anymore; you look at the whole system, from employees, supply chain, consumer and end-of-use life/waste. A standard business model only looks at the customer and how to profit by satisfying customer demand. In a sustainable model, you also look at the societal and environmental impact, so society and the environment become your primary stakeholders.
The path to becoming a more sustainable business is long, and no strategic sustainability plan looks the same. It may seem like an overwhelming task to tackle, but it can be done in small, achievable stages. Each company’s sustainability journey is just that – a unique journey. There will be numerous challenges, ups and downs, and educational moments along the journey. There are plenty of small goals you can set and take today. With each plan, new doors will open and you’ll become a more efficient steward of the planet with each accomplishment.
Looking for a place to start? Here is a quick, seven-step overview to get started with the process.
- Step 1: Create a green team or sustainability task force.
- Step 2: Define your new vision, mission and values.
- Step 3: Assess your current sustainability performance.
- Step 4: Create a plan for change (set small, achievable goals to start).
- Step 5: Get your employees engaged and on board.
- Step 6: Implement the plan and assess the results.
- Step 7: Don’t forget to celebrate your successes.
Outside of political views and opinions, it simply makes sense that we should all be better caretakers of this planet we call home. It starts with each business taking a step toward sustainability to make a difference. Let’s make a shift toward a greener and more sustainable business future.
At Moonshot, we feel it is essential to assist building companies with ESG in mind and that it is incorporated into the design process from the start. It is far easier to build in sustainability and consider each stage of the value chain than to adapt to an entirely new business model later. FBN
By Amanda Kristinat
Amanda Kristinat is the chief financial and operations officer for Moonshot. She is an award-winning executive with 24 years of experience in for-profit and non-profit management, has a certification in Business Sustainability Management through the University of Cambridge Institute of Sustainability Leadership, is on the Forbes Finance Council and is a seasoned entrepreneur. To find out more about Moonshot and our programs, go to www.moonshotaz.com.