Consulting Services - Environmental Strategy

ESG Scan
Through our ESG Scan diagnostic services we help organizations understand how the ESG function interacts and coordinates activities internally and as appropriate with external parties. The object of the process is to identify connections, strengths, and hidden accomplishments that can be leveraged to enhance performance.

The ESG Scan process is well vetted in that it has been fine-tuned over many years. It is data driven to be objective. The first step of the assessment process is to understand how the client organization manages ESG activities. We gather information from interviews and documentation review trying to understand:

• What is important from an ESG position.
• What is emphasized?
• Who is involved?
• How is it executed?
• Do you key stakeholders know what you are doing and why?

After gathering background data, we analyze information relative to four attributes of ESG governance functions:

• Integration with Organizational Processes
• Alignment of ES Investments with Risks and Stakeholder Views
• Measuring and Communicating Results
• License to Perform

These four pillars address the following basic questions:

• Does the ESG policy and programs reflect current priorities and goals?
• Are staff resources assigned to the most significant ESG issues from an internal and external perspective?
• Are the staff equipped to manage ESG either through training, experience, or linkages to internal resources?
• Does the organization manage its ESG risks minimizing financial liabilities now and in the future as operations change or expand?
• Do your metrics reflect a focus on key actions and programs?
• Are there any pending lawsuits that might impact finances?
• Do you stakeholders agree with your strategy so that they serve as ambassadors or keep on coming back for more services?
• Is management supportive of ESG?

Based on the analysis, we summarize what seems to be working well so that we can determine if there are any strengths that can be leveraged for greater gains in performance. For example, based on feedback, maybe employees and external stakeholders do not fully understand the community involvement initiatives and interpret it to mean economic development. However, community involvement resources really refer to the efforts to recruit residents for employment.

Throughout the assessment process Obbagy Consulting’s approach is to keep the client organization informed to ensure the ESG Scan diagnostic results are accepted, and the preliminary recommendations are realistic and actionable. Sometimes our recommendations are simply to better articulate the connections to program activities so that management and stakeholders understand. Alternatively, the recommendation might be to consider reallocating some resources to higher risk ES activities.

Some clients also want to have an overall opinion as to the status of ESG activities to use as a tool to communicate with stakeholders or Boards of Directors. Obbagy Consulting’s offers three opinions as follows:

• High Return: ESG activities are aligned with the business activities and are providing benefits to the organization and its stakeholders.
• Moderate Return: Some optimization is needed to better align the ESG function with the business to yield greater benefits to the organization and its stakeholders. 
• Variable Return: ESG requires greater alignment with the organization’s risk profile and internal policies to deliver benefits to the business and its stakeholders. ​

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