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What is “Holistic ESG”, Anyway?

If you want to improve your overall health, and you follow a plan that includes a healthy diet, exercise, and getting enough sleep, you’re probably going to be more successful than if you focus on just one of these things. 

The same goes for sustainability — if you focus on all the different ways your business affects the world around it, you’re going to have much more of an impact than if you focus on just one area like recycling or reducing your energy usage. 

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This is what many people refer to as “holistic ESG”. But what exactly does it mean to have a holistic approach to ESG, and how do you achieve it?

Looking at the big picture

By now, most organizations understand that ESG is about more than just greenhouse gas emissions. Holistic ESG is about the business’ impact as a whole — addressing the full range of environmental, social, and corporate governance factors. 

This includes everything from air quality and waste management, to employee health and safety, to diversity and inclusion, to customer privacy and data security, to business ethics and competitive behavior. 

Holistic ESG isn’t a one-size-fits-all approach. It’s about understanding which issues are material, or relevant and important, to your business specifically. From there, you can set goals and identify resources that will help you move from value protection, to value creation. 


Different strokes for different folks

Holistic ESG considers a wide range of stakeholders — not just customers and investors. It’s rooted in the understanding that everything a business does impacts its employees, the community, and the world around it.  

For example, if a company doesn’t pay its workers a living wage, this forces them to work more hours in order to provide for their families. It also contributes to higher rates of poverty and joblessness in the community. On a larger scale, high rates of unemployment can stall economic growth and recovery.

Understanding this, companies that take a holistic approach to ESG look at all of the various stakeholders that may be impacted by their business. This includes internal stakeholders like executives and the board of directors, managers, and frontline employees. It also includes external stakeholders like customers, shareholders, institutional investors, insurers, regulators, vendors and suppliers.

76% of consumers say they will stop buying from companies that treat the environment, employees, or the community in which they operate poorly [PwC]

Involving all employees at all levels of the organization, every day

Improving ESG performance is a big goal, and it takes a lot of effort and resources. Having a single department or a handful of people who are responsible for ESG simply won’t work. 

Take employee safety, for instance. Studies show that for every incident, there are approximately 20 near misses. But if the only people responsible for identifying and reporting safety risks are managers, then you’re almost certainly going to miss out on some of these early warnings. Involving frontline workers in reporting near misses and risk observations is critical to identifying potential hazards before an accident occurs.

The same goes for other aspects of ESG, like product safety, diversity and inclusion, and regulatory compliance. Holistic ESG is about creating a grass-roots sustainability culture, where everyone in the organization feels a sense of responsibility and for sustainability and pursues it every day. Not because their boss or CEO says so, but because they are aligned with the business’ mission and vision. 

holistic esg

Perillon offers an integrated EHS cloud platform for global EHS risk and compliance management. Our mission is to help clients create value by measuring and managing operational EHS risk and compliance data at all levels of organization to provide accurate ESG metrics. Request a demo today! 

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