Whether a company holds and acts in accordance with environmental, social and governance (ESG) principles is no longer a shiny bonus — it’s table stakes for many companies. Prioritizing ESG impacts reputation, influence and engagement with a variety of stakeholders – including customers, employees, communities and candidates. How we care for our people and planet matters — and that journey starts by designing and implementing an ESG strategy.
The importance of ESG
ESG is generally focused on how an organization affects the planet (environmental), how an organization cares for its employees, clients and communities (social), and how it conducts itself (governance). While there is a direct linkage to a company’s values, ESG is much more than that. It requires a strategic action plan specific to the company it’s designed for — with clearly identified directives and deliverables carefully woven into its business and people practices. These defining principles serve to better our environment, drive tangible business outcomes, and guide future investments.
ESG also presents a business growth opportunity. A thoughtful plan can serve as a framework to guide organizations in transforming their operations and practices. Experts note the increasing value of ESG enhances employee experience, improves business performance and helps enhance risk management.
Ongoing change in the governance space encourages ESG compliance. Regulators have homed in on those falling short on requirements. Globally, many countries levy fines and restrictions on businesses that fail to meet ESG standards; in the U.S., the Securities and Exchange Commission (SEC) has proposed new rules for publicly traded companies focused on ESG disclosures and documentation. In several parts of the world, we’ve seen class action suits brought against companies whose standards don’t align with their broad ESG statements.
Above all, it matters because business leaders carry responsibility. At Sedgwick, we move forward intentionally by following a multiyear ESG strategy designed to maximize global impact by 2030.
Characteristics of a strong ESG strategy
To create a robust plan, a company should identify which areas in their operations could have most impact. Next is to establish a framework, determine specific focus areas, craft initiatives, create timelines, and identify KPIs. Focus areas may include things such as reducing carbon emissions; optimizing employee benefit packages to ensure wellbeing; solidifying business ethics; and harnessing Diversity, Equity, and Inclusion practices. Then, once the strategy and action plan are in place, ongoing governance is important to ensure initiatives and outcomes are being delivered as designed. Doing so keeps an organization on track and accountable to its goals.
A unified, organization-wide commitment to ESG objectives must be present, and the strategy must be agile in nature to be able to shift according to evolving circumstances and emerging priorities. Communication with key stakeholders must be ongoing to continue to bring them along the journey. Establishing a committee of enterprise-business leaders who own the key focus areas in the ESG plan — such as heads of procurement, DEI, IT, and legal and compliance — will be fundamental to success. Each member has a unique perspective and has ownership within the strategy and its execution. This team will ensure decisions are being made within the ESG strategy, that these decisions can be executed effectively and that there is unity from day one.
Global adaptability
On the global scale, a strong ESG strategy and plan must be relevant and enterprise-wide, which provides a consistent backbone across geographies and business units. In addition, it must be flexible enough to account for localization needs and enable localized implementation. Consider geographies where the strategy will be applied; certain legislation or rigorous compliance requirements may keep steady or accelerate the delivery of certain initiatives and how that can impact how certain elements of the strategy need to be delivered.
Sedgwick’s strategy is a holistic, global one — designed to harness flexibility amid ever-changing conditions. Built on a solid framework, we reach goals through pointed initiatives and stay on track by continually assessing progress against key performance indicators. From there, we ensure ongoing governance and transparency of progress, both internally and externally.
How far we’ve come — and where we’re headed
Sedgwick has had a longstanding commitment to making a meaningful difference around the world through our environmental, social and governance (ESG) efforts. We’ve taken actions to reduce our greenhouse gas emissions through things such as using virtual inspection tools when available rather than traveling to loss sites. We have reduced our car fleet and increased the number of electric and hybrid vehicles within the fleet. We have reduced paper use by transitioning numerous processes to digital capture and storage. Most recently, we engaged digital experiences and began using QR codes at conferences and events.
We have integrated diversity, equity and inclusion (DEI) throughout Sedgwick’s business practices, and more than doubled annual spending with diverse partners in the past four years. And since Sedgwick’s inception more than 50 years ago, we have consistently operated as a values-driven company that maintains a strong focus on business ethics and unabatedly enforces its code of conduct.
It is true we need each other to get there. Sedgwick’s multi-year strategy encompasses more than 30,000 colleagues across 80 countries. Every person, every community we inhabit, is integral to achieving our ESG vision. And a robust communication strategy ensures colleagues, clients and communities know that we care — and that we’re delivering.
By coming together we can make a tangible positive impact. It’s an ongoing journey and we collectively have much further to go. But as more of us strive for sustainable growth and to positively impact the world, there is limitless possibility — so long as it is driven by a thoughtful, intentional approach. For global companies like Sedgwick, we have the responsibility — and privilege — to embody corporate citizenship and deliver on initiatives that showcase regard for a healthier planet and a more equitable workplace.