ESG and an organisation's governance

How do you start the ESG conversation in your organisation? What is the board's role? How do you go about developing and embedding ESG thinking in your activities, plans and strategy?

Category
Environmental, Social and Governance

In addition to the moral and business arguments (i.e. how it will positively impact participation rates, attendance, funding and investment opportunities, etc.) for placing ESG at the heart of your activities, governance codes and frameworks are increasingly putting a responsibility on organisations and their boards to factor a wider range of considerations and stakeholders into their decision making and long-term strategy-setting.

For our sector, this reflects an acknowledgement that sport and its organisations do not exist in a vacuum, but rather occupy a central role in a network of connected parties. These range from participants, volunteers and employees to customers, fans, suppliers, partners, funders and government. With many stakeholders in between.

Sport of course also has a very direct relationship with local communities and with society at large. It also has a huge platform, with the potential to effect real change in people’s lives and also to play a leadership role through its largely unmatched influence. How can it use that voice to shift the conversation, not just at the highest level, but also at a local, smaller scale?

This places responsibilities on our organisations and the people who lead them.

The Sports Councils are taking these responsibilities seriously:

Sport England

Its ten-year Uniting the Movement strategy recognises the transformational impact that sport and activity can have on the nation’s health and wellbeing. It sets out five big issues to tackle:
- connecting communities
- recovering from the Covid pandemic and reinventing as a sustainable network of organisations providing sport and physical activity opportunities for all
- focusing on positive experiences for children and young people
- connecting with health and wellbeing
- creating and protecting the places and spaces that make it easier for people to be active
Every Move sustainability strategy and action plan focused on Sport England leading, inspiring and supporting the sector to become environmentally sustainable, enabling greater opportunity for all people to participate in sport and physical activity, now and in the future.
Member of the Sport and Environment Climate Coalition (SECC) and signatory to the UN Sports for Climate Action Framework

UK Sport

Its ten-year strategic plan - Powering Success, Inspiring Impact – includes a core ambition to Inspire positive change:

“We will contribute to a happier, prouder and more connected society, using the power and platform of sport to inspire positive change.” It aims to “harness the power and platform of sport to drive positive change across wellbeing, diversity, inclusion and sustainability; walking the walk and using our voice to inspire others to act.”

Its environmental sustainability strategy includes a goal for high-performance sport to have a net positive impact on the environment by 2040 and for UK Sport itself to achieve net zero in its activities and operations by 2030.
Member of the Sport and Environment Climate Coalition (SECC) and signatory to the UN Sports for Climate Action Framework
Its Organisational Health tool includes Environmental and Social Impact as one of the 12 components that underpins well-run, effective, and sustainable sports organisations, within a thriving sporting system.

Sport Wales

Its Environmental Sustainability Plan – developed in partnership with the Carbon Trust – is aimed at helping the sector to make improvements and to contribute to realising the Welsh Government’s ambition for a net zero Welsh public sector by 2030.
Member of the Sport and Environment Climate Coalition (SECC).

sportscotland

The sportscotland Climate Action Framework combines the five UN Sport for Climate Action (UNS4CA) framework action points and the BASIS 12 Principles to guide management actions and policy making around climate change and sustainability.
Includes a self-assessment tool.
Member of the Sport and Environment Climate Coalition (SECC)

What should the board be doing about ESG?

More and more boards are having conversations about ESG. This will only increase with the emphasis which funders are placing on action being taken. Including ESG on board agendas can help an organisation not only to better manage ESG issues, but also to ensure the organisation is meeting its stakeholders’ expectations, from both a regulatory and a reputational perspective.

Different organisations are at vastly different stages of their ESG journey, the scale and impact of their activities and the resources available to them. It’s up to the board to set the scale and ambition of the organisation’s ESG activity accordingly.

Boards may want to begin by considering what ESG issues are most relevant (or ‘material’) to their organisation. Where feasible, this can be facilitated externally , and can involve a significant amount of research and engagement with stakeholders, depending on the complexity of the organisation. However, it is also perfectly possible to undertake this exercise internally and it offers an excellent opportunity to think deeply about the organisation’s circumstances and what it can realistically (but also ambitiously) aim to achieve.

To avoid straying into operational business, it is sensible for a board to delegate this undertaking to its management or to a team within the organisation which can dive into the topic and explore key issues and areas of operation, identifying potential actions which can be taken. The board can then be apprised of the findings of the exercise or can provide any requested input.

Once the material issues have been identified, organisations can begin to pinpoint in more detail areas for action, with the board approving this and setting appropriate targets.

Having – or establishing – the right internal infrastructure can support ESG activity. Appointing an ESG lead at management level, and/or designating a particular board member to look at ESG in more depth, can help to raise the profile of ESG within an organisation, providing both momentum and accountability. This person – or team – can help to achieve buy-in for ESG activity and initiatives and also highlight the risks of inaction. Some organisations may choose to establish working groups or committees, to look at ESG in general, or to look at one particular area of high importance.

The inclusion of ESG issues in strategic discussions and future developments is likely to make organisations better places to deal with future challenges and business-disruptors. Boards that act now to frame their ESG ambitions will be ahead of the curve in terms of effective delivery in both established and new formats. They will also likely be better positioned to attract and retain key stakeholder groups and staff/volunteers whose interests align and who are enthused by the organisation’s vision and commitment.

From a management perspective, ESG can profoundly impact the way an organisation operates, opening new challenges and new opportunities. Securing the commitment and engagement of management (and the workforce at all levels) will drastically enhance the success of embedding an ESG strategy throughout the organisation and its activities.

It will also help to streamline reporting requirements – those who deliver and report on activity and progress will be in alignment with the board which maintains the oversight function. Speaking the same language and pulling in the same direction will maximise the rate at which the strategy can be implemented.

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