Research Outline

ESG Strategies of SMEs


To provide an analysis of how SMEs manage their ESG improvement program. This will include providing three case studies of companies that have successfully managed their ESG improvement program with a specific focus on:
a. How they managed the programs.
b. How metrics are defined and tracked.
c. What software/tools were used in the program.
d. How the software/tools were implemented and rolled out.
e. How each company communicates its ESG programs to internal and external stakeholders.
f. What are the financial results from these programs e.g. getting green loans, etc.
g. Any pain points and challenges the company faced during the program.

Early Findings

A preliminary search found that information on ESG improvement program management is available.

ESG Improvement Management

  • To ensure that a company's reputation is not at risk, it is important that the company has a strong sustainability strategy.
  • "Executives and stakeholders recognize that results-focused strategies are evidence of sound management, resulting in greater readiness to adapt to changing markets and respond to customer needs. A clear sustainability strategy helps to provide confidence and reassurance that a company has a solid foundation for future success."
  • However, the successful implementation of these strategies depends on how the company integrates ESG into its business strategy.
  • A report by KPMG provides the following strategies toward ESG improvement:
    • Understand the vision
    • Set strategic goals
    • Identify and prioritize the issues
    • Set targets and KPIs
    • Develop and implement initiatives
  • Another report by Goby Inc. recommended the following seven steps toward implementing a strong ESG strategy:
    • Set overall goals
    • Create a budget
    • Evaluate opportunities
    • Develop a framework
    • Build a sustainability team
    • Evaluate progress
    • ESG reporting/disclosure

Target Setting Steps

The following steps have been recommended by KPMG as key steps to target setting:
  • Seek senior management’s buy-in
  • Focus on material topics/metrics and specify KPIs
  • Establish a base year
  • Define scope and boundary
  • Establish a time frame
  • Plan
  • Set goals
  • Monitor and communicate progress

ESG Data Management

  • It is important to maintain a robust and reliable data collection system for target setting and proper reporting. To achieve this, there should be:
    • A good understanding of ESG data and the process
    • Clear roles and responsibilities within the system
    • Have a robust data management system
    • An efficient internal control team.

Summary of Preliminary Findings

  • The first hour of research provided an overview of how to develop a strong ESG improvement program based on expert recommendations.
  • While the initial hour of research did find examples of companies such as Walmart and Cerberus that have successful ESG improvement programs, we recommend continued research to build case studies of how these companies are doing it. Therefore, we recommend continuing this research with the following steps below.