Crafting an effective environmental, social, and governance (ESG) program is not an easy feat. Moreover, how to go about doing so is different for every company. At Compliance Week’s “Everything ESG in 2021” virtual event Tuesday, compliance/sustainability leaders from two firms shared how they are successfully working to achieve this goal.

As ESG becomes broader in scope, it is necessitating companies cast a much wider net as to how to address those issues. Thus, part of crafting an ESG program involves thinking about what your investors and the communities in which you operate care most about.

“Keep an open mind as to what the program should be and what it should look like,” said Stuart Altman, chief compliance officer at ContourGlobal. “ESG is different for every company, and you have to figure out what makes sense for you.”

As a power generation business, ContourGlobal has a strong commitment to environmental and sustainability initiatives, but the governance piece is also becoming increasingly significant. “The modern slavery component, especially as a U.K.-listed company, has taken on greater importance for us,” Altman said.

ContourGlobal takes a two-pronged approach to its ESG strategy. The first is to assess what is expected of the company from its investors and other stakeholders, while the second is to assess what the company expects of itself, Altman said.

ContourGlobal has several operations in Europe, where the concept of thermal energy is becoming a bigger priority. The company is currently looking at how to address that—an example under the first prong.

Under the second prong, social investment is a key part of the company’s ESG strategy. “We really put an emphasis on investing in projects, rather than giving money,” like helping to build schools and hospitals, Altman said. As another example, “In Rwanda, we literally pull natural gas out of lake water and turn it into energy that powers most of the capital,” he said.

From a compliance and risk management standpoint, “We have a more diversified approach to ESG than some companies,” Altman said. “It doesn’t sit in one place with one person.”

“Keep an open mind as to what the program should be and what it should look like. ESG is different for every company, and you have to figure out what makes sense for you.”

Stuart Altman, Chief Compliance Officer, ContourGlobal

ContourGlobal has both a health and safety team, as well as an environmental team. The company also has a separate committee that focuses on sustainability and community growth in terms of how to give back through social investment. This siloed approach generally has worked well, Altman said, “but it does require a little more coordination and a little more thought to how the different constituents work together.”

Each year, ContourGlobal—which follows the United Nations’ Sustainable Development Goals—sets a series of specific targets, Altman said. One goal for 2021 is to increase renewal development by 100 megawatts. “We try and be pretty transparent about where we’ve been successful or not,” he said.

Additionally, ContourGlobal produces an annual sustainability report covering a wide range of topics. “We try to use in our reporting qualitative and quantitative information,” Altman said. This includes case studies showing stakeholders what projects the company has done throughout the year. “A lot of ESG comes through in those narratives, as opposed to a series of dashboard pie charts,” he said.

How Osprey leads through ESG

Outdoor hardgoods company Osprey takes a similar approach to its ESG program. This process began with reevaluating the company’s mission, vision, and values statement and “connect[ing] them much more to our ESG program,” said Mark Galbraith, vice president of product and sustainability lead at Osprey.

An internal cross-functional group was created to establish some aggressive overall ESG targets. “We set the somewhat crazy goal of being the most progressive, transparent, and sustainable hardgoods outdoor company,” he said. Such a goal made Osprey the first hardgoods-specific brand in the United States to make such a commitment.

The next step was to comprehensively reassess its policies and procedures—including everything from the company’s raw material process to the chemicals that go into its textile products down to its labor practices and supplier workplace code of conduct. The company’s goals are further linked to employees’ job descriptions, annual and quarterly goals, and performance reviews to ensure ESG values are woven into company culture as much as they are into Osprey’s products themselves.

From a supply chain risk management standpoint, “it starts with setting goals that you can measure,” Galbraith said. Osprey has thousands of independent factory workers and raw material suppliers, “so, we have a really complex supply chain that we’re trying to manage.”

Osprey “relies a lot on industry expertise and third-party verification,” Galbraith said. Trusted certifying bodies in the textile industry include bluesign, the Global Recycle Standard, and the Global Organic Textile Standard—each of which sets strict responsible and sustainable standards concerning the development and manufacturing of textiles. “We have suppliers, too, who are certified as organic or certified as bluesign systems partners,” Galbraith said.

For any company, crafting a strong ESG program overall requires establishing a framework that “fits deeply into the company’s mission, vision, and values,” Galbraith said. “Otherwise, it will stand separate from everything else you do.” An important piece of that, he said, is to always strike the right balance between profit and people, the planet, and the company’s core values. And lastly, don’t forget to celebrate small successes, because even those can make a big, lasting impact.