What is the difference between sustainability and ESG?

Sustainability is at the heart of current corporate plans, looking to integrate respect for the environment, social and cultural diversity, and integrity into their core business practices. That’s where the trendy corporate acronym ESG comes in. It stands for environmental, social, and governance, and they are the three pillars of the new landscape for organisations to assess their sustainability performance. It is a management and analysis framework designed to help stakeholders measure and understand how sustainably an organisation is operating or just how they’re managing risks and opportunities related to environmental, social, and governance criteria. Environmental is quite self-explanatory, referring to the overall impact the business has on the ecosystem; this is where initiatives such as reducing carbon footprint and natural resource management play an important role. Social expands to both the internal corporate scope (employees, suppliers, clients, etc), and the external communities; acknowledging and respecting idiosincracies, cultural diversity and inclusion is key for building respectful –and lasting— relationships. Compliance with internal control practices and regulatory policies is what governance is about, making sure the organisation not only follows the rules of a level playing field, but also cares about leading with integrity.

To be truly sustainable, businesses need to apply ESG strategies at the heart of their operation. Increased awareness of their ESG accountability and the importance of including sustainable practices, prioritising operational and cultural change towards natural resources preservation and aligning with overall social responsibility is what makes an organisation sustainable.

Companies must first measure their ESG actions so they can understand their performance and current trends, setting ambitious and measurable goals in creating environmental and social impact. This allows businesses to adapt the ESG framework to different aspects, particularly in internal politics, investment, and banking, resulting in long-term benefits for multiple stakeholders, driving sustainability in operations and building resilience capabilities in response to the uncertainty of the future.

Designing and implementing an ESG strategy aimed at reaching higher sustainability standards can lead organisations to benefit from increased profitability, creating positive social and environmental impact in their communities.

There are many scoring systems and rating platforms, from consulting firms, NGOs, government agencies or a built-in system within the organisation. Assessments from financing groups and development banks deserve special mention, as these entities identify risks and return on investments aimed at improving ESG scores.

At GHD we support clients and communities on their road to sustainable growth and development through a multi-disciplinary approach to four key areas.

Our advisory group can provide technical, digital, and management consulting services on achieving ESG-driven outcomes from development to implementation. Some of our successful projects are the following:

• Reduction of Vontier’s Greenhouse Gas Emissions
• Establishment of the 2027 Net-Zero Strategy for Bruce Power
• Mitigation of hazardous waste and costs from Shell
• Built sustainable practices for 2 Canadian provinces: New Brunswick and Nova Scotia
• Creation of an in-depth analysis of Montem’s Renewable Energy Development

With our multi-disciplinary approach and specialised team, we successfully create resilient outcomes and deliver sustainable performance to our clients and communities. Connect with us to learn more about our services.

^{Diligent n.d., ‘What is ESG? An environmental, social and governance guide’, retrieved June 6, 2023, from Diligent}

^{Iacurci, Greg 2023, ‘Biden used first veto to save a 401(k)-investment rule. Here’s what it does’, retrieved June 6, 2023, from CNBC}

^{Mathis, Sandra and Stedman, Craig, 2023, ‘Environmental, social and governance (ESG)’, retrieved June 6, 2023, from TechTarget}

^{Miller, Noah 2022, ‘ESG score’, retrieved June 6, 2023, from Corporate Finance Institute}

^{MSCI n.d., ‘ESG ratings’, retrieved June 6, 2023, from MSCI}

^{Tellez, Anthony 2023, ‘What is ESG investing—and why Republicans are trying to ban it from retirement funds’, retrieved June 6, 2023, from Forbes}