“We received a call saying that one of our client groups had earned EcoVadis Platinum, placing it in the global top 1% for ESG assessment.”
As soon as I arrived at work on February 2, news from clients that deserved celebration kept coming in. One company that had targeted the top 1% in EcoVadis earned a Platinum Medal, and another entered the global top 15% in its first EcoVadis assessment response. Of course, as an ESG management advisory firm, not every outcome was something we could celebrate. Sometimes the result does not match the effort, and even when we saw it coming, once the result is out we can end up worrying more than the client does. (*EcoVadis is the world’s largest provider of business sustainability ratings, and about 150,000 large, medium-sized, and small supply chain companies in more than 200 countries respond to EcoVadis assessments.)
EcoVadis assessment areas
There are quite a few people who have concerns about ESG assessments. An exam for the sake of an exam? Formalities for the sake of assessment? Greenwashing? These are some of the reasons. ESG assessment is a tool and a process of ESG management. It is a ladder for achieving the ESG management goals set by an organisation. Even when the ladder feels impossibly high, could setting and achieving small goals for how many rungs to climb, or how many at a time, create positive turning points on a long journey?
ECONINE advises large companies, mid-sized companies, and small and medium-sized enterprises on ESG assessments, and we are working with organisations in the top 1%, steadily accumulating that experience. Now there are also organisations working hard to maintain the 1%. When you work with organisations like these, you come to know this: the goal for ESG assessment results is only one part of the long journey called sustainability management.
Most companies that aim for a high level in ESG assessments are organisations that either carry out or keep in mind practical measures. They calculate and reduce greenhouse gases, pay attention to changing ESG issues, and receive ESG training from time to time. Even if the ESG manager leaves, they hire again, or even when circumstances are not easy, they maintain the function. They think about whether to receive advisory support to improve what is lacking, and if they cannot afford advisory support, they seek indirect advice through networking. Even when Trump becomes president, even when people say that the era of ESG will pass like a trend, they still allocate resources such as time, cost, and personnel to ESG. And quietly and persistently, they internalise it.
Global ESG assessments have long since advanced into systems that filter out formalities, or “assessment for the sake of assessment.” If an organisation sets out to greenwash, there may be no way to withstand it, but if it continues responding to repeated assessments, it will inevitably reach a limit at some point. Even if one wants to hide behind a screen, we have entered an era in which AI and stakeholders will eventually lift the curtain. I dare say that we have reached a phase in which real ESG management activities are necessary in order to receive a good ESG assessment.
I explain the practical field of sustainability management in four parts: 1) policy, 2) assessment, 3) assurance, and 4) disclosure. All four areas are important, and they must fit together like cogwheels. Still, because the results and performance of ESG assessments are expressed as intuitive and visible scores or ratings, organisations cannot help but feel sensitive about them. I understand that. From the position of an advisor, I always aim for a higher rating than before. I think that is a sense of responsibility that an advisor must inevitably carry.
What do you think is the meaning of responding to ESG assessments?
Do you remember the scores you received in Korean, English, and math in your second year of high school? I do not remember mine at all. But I remember wanting to get good scores so badly that I carried vocabulary cards even to the restroom, and solved problems with friends during evening self-study and felt happy. I also remember blaming myself for getting questions wrong when I actually knew the answers. I remember the attitude and heart of that time, and the large and small episodes. I remember staying home alone during the Chuseok holiday to draw 100 PPT pages in order to enter a certain organisation as a professional, and the moments of going through a fourth interview. I know that amid all that effort, the feelings and memories of large and small achievements settled as assets and formed who I am today. In the end, I think I am living through the experience of having focused on something and done my sincere best.
Wouldn’t the ESG assessment field be similar? Within an organisation, people make up their minds together to do ESG sincerely and well, set goals for ESG assessments, and use those goals as a standard through which they experience large and small achievements and failures. In doing so, they naturally improve the organisation’s ESG constitution. If an organisation continues ESG management, perhaps far in the future the memory of the score will fade, and it will internalise ESG by adjusting and coordinating the way it approaches ESG and its goals. What if we gave meaning to responding to ESG assessments as a process of training through which ESG management goals are achieved?
There is nothing wrong with ESG assessment itself. We need to look back at the attitude and mindset of the organisation facing ESG assessment.
If a company is facing an ESG assessment, I hope it will respond to that ESG assessment to the end of the universe. I want to say: respond to ESG assessment vigorously, sincerely, without greenwashing, with clear roles and responsibilities (R&R), by setting goals for each ESG field and coming together organisationally.
* For reference, ECONINE is an ESG advisory firm that practices ESG management, and it was the first Korean advisory firm to achieve the global top 1% (Platinum Medal) in an EcoVadis assessment. The people who work at ECONINE respond to ESG assessments themselves. :) We understand the EcoVadis questions that are updated every year, think through them anew, and refine our systems. For example, we calculate greenhouse gas emissions, purchase voluntary carbon credits to offset carbon emissions, and this year, through B Corp certification, we are also identifying areas for improvement in labour and human rights and information security.
ECONINE’s solution impact
Go to the ECONINE website: www.econine.kr
Go to ECONINE’s online education platform, ESG Edu: https://esgedu.econine.kr/