According to a recent study by ISN, only 16% of companies have strategies in place for reducing greenhouse gas emissions. Furthermore, a mere 18% are calculating and reporting both Scope 1 and 2 Emissions data. This data underscores the lack of comprehensive ESG management processes in many companies.
Rick Dorsett, VP of Health, Safety, Environmental, Sustainability, Insurance and Risk Management at ISN, notes that companies are increasingly turning to data to identify strengths and weaknesses in their current ESG management processes. This is due to mounting regulatory requirements and pressure from investors, industry peers, and consumers.
Key Findings from the Study
The study revealed several key insights about the state of ESG management in companies:
- On average, 45% of companies reported implementing an Environmental Management System (EMS). Companies in mining, oil and gas extraction, utilities, and transportation and warehousing were more likely to have a management system in place.
- 35% of companies have policies condemning forced labor practices, with over half (53%) providing general training on labor rights for their workforces.
- 40% of companies have a human rights policy in place, with 34% indicating training is provided.
- 35% of companies include social criteria during the prequalification and screening process for subcontractors and suppliers, while 42% have a vendor code of conduct in place.
- Nearly 70% of companies have an anti-corruption policy in place and 50% provide training on anti-corruption.
- 81% of companies have a Company Code of Conduct in place.
The Importance of Diversifying Supply Chains
Dorsett emphasizes the importance of working with diverse and small businesses as a way to add value to companies and communities, furthering an organization’s commitment to social responsibility. Diversifying a supply chain also increases opportunities for businesses to expand their markets. Many of ISN’s contractors and suppliers reported a diverse owned status, defined as being at least 51% owned, operated, and controlled by a minority designation.
Dorsett’s insights from the study shed light on the current gaps in ESG management within companies. It is evident that there is a need for companies to ramp up their sustainability efforts and adopt more comprehensive strategies to address issues such as greenhouse gas emissions, labor rights, human rights, social criteria in supplier screening, anti-corruption measures, and codes of conduct. By diversifying their supply chains and working with diverse businesses, companies can not only enhance their social responsibility but also create new business opportunities and markets.
