Sustainability and other phrases like eco-efficiency, corporate social responsibility, and net zero are well established in the consciousness of politicians, organizations, and consumers. We have become accustomed to inside-out sustainable practices, products, declarations, and actions on stopping pollution, better employees’ treatment, and building communities and partnerships – to not only cause less harm but also be restorative and regenerative.
Sustainability vs ESG
However, the new term ESG has recently dominated the corporate and investment world, causing slight confusion about what it’s all about.
ESG (environmental, social, governance) has started appearing literally everywhere: from an organization’s strategy to its communications, advertising – and the key element: the organization’s non-financial reporting. It is hard to understand this sudden craze for ESG, though not if you understand that it is simply about finance and regulations. This outside-in approach manages the issue of how they affect business performance to let the investors know whether a company is at risk from environmental and social impacts on the business.
In other words, ESG centers around financial risk and returns, while sustainability focuses on supporting society’s wellbeing and the planet’s health by being a core value of the organization.
Inside-out and outside-in perspectives are complementary as they are material to the company. However, it is crucial that the ESG approach does not dominate the reporting system, as creating shareholder value is not a way to contribute to making the world a better place. Sure, shareholders should do well, but only after a company has served a purpose for stakeholders and helped protect the planet and the resources we all rely on to survive and thrive.
What really matters
How companies act, what kind of information they reveal in their reports, and whether this applies to their core business and, in particular, any development initiatives implemented by projects becomes the most crucial issue.
There are some emerging questions. Shouldn’t sustainability be at the heart of every organization’s projects? Shouldn’t companies, with full transparency, disclose information about how investments are carried out and what long-term environmental and social impact the results will have? Should these activities not be dictated by regulations and investor pressure but by conscious decisions to reduce negative impacts and increase positive influence?
The obvious answer is yes, especially in light of the increasing number of lawsuits regarding greenwashing practices. In other words, the time is coming when pulling the wool over the eyes of consumers and investors will no longer be possible.
There are solutions to help
Instead of adjusting actions to regulations and bending reports, it is time to start from scratch and integrate sustainability into the definition and planning of projects and products. The tools developed by Green Project Management (GPM) provide the integration; the GPM360 Project Assessment, for example, is based on the P5 Standard for Sustainability in Project Management’s impact analysis which incorporates triple bottom thinking and maps directly to the Sustainable Development Goals but emphasizes project process and the resulting outcome (product). The tool ensures that sustainable development is included in both the way the project is managed, as well as in the product and its long-term impact on the environment. Regular analysis also enables transparent reporting of plans and results of sustainable practices.
Before sustainability was a mainstream corporate focus, GPM has been systemically striving to evolve the project management profession so it can play a significant role in transforming projects, organizations, and industries in a sustainable direction.
GPM’s activities focus not only on implementing methodologies and standards by project managers but also on changing the mindset of decision-makers to ensure that products and services are sustainable the moment they become an idea and then through the project and product lifecycle. This approach is necessary in order to change our collective behavior so that we can lessen our degenerative impacts on societies and the environment and deliver value.
GPM EMEA Business Development Manager