Prepare your company for the growing focus on ESG by using OGSM
Businesses are the most trusted institutions and expected to take a larger role in solving societal problems, according to recent results of the global Edelman trust barometer. Also investors, clients, employees and other stakeholders place an increasing focus on the Corporate Social Responsibility (CSR) Performance of an organization. Also presented on the headers Environmental, Social and governance (ESG). Change is taking place as an ever growing number of businesses, investors and consumers shift to creating and supporting products and services that support sustainability. This is measured by a set of criteria and reporting standards, ESG.
OGSM for your CSR plan or ESG
OKR is fundamentally a method to set and achieve meaningful goals. With OKR you systematically link your goals to measurable results. This way, it is clear to everyone how the objective is progressing and when it has been achieved. With OKR, you create direction and alignment within your organization. The aim is to make sure that everyone knows which direction the organization is headed, and where the priorities lie.
Your ESG cascaded with OGSM
OKR stands for Objectives and Key Results.
OKR’s Objectives are the long-term goals that are based on your vision and mission. They are descriptions of what you want to achieve. They should be short, ambitious, easy to understand and they should set a clear direction. If your Objective doesn’t motivate and challenge the team, it’s not a good Objective.
OKR’s Key Results are the measurements of the Objectives. If you get a Key Result, it must contribute to one of the Objectives. OKR’s Key Results provide an indication of the Objective’s progress. They should be SMART: specific, measurable, achievable, relevant and time-bound. Alternatively, Key Results can be defined as ‘action results’, as concrete deliverables.
Corporate ESG data reporting
With corporate ESG reporting, companies enhance transparency by providing quantitative and qualitative data on their activities in three areas: environmental, social and corporate governance.
By voluntarily providing data following ESG criteria, companies consider their impact on sustainability issues and are transparent to their investors, customers and other stakeholders on how they mitigate risks and generate sustainable long-term financial returns.
Companies that take their environmental and social responsibilities seriously and have strong governance have demonstrated better financial performance and resilience. In fact, a study by BlackRocks shows 81% of a globally representative selection of purpose-driven companies with better ESG profiles outperformed their counterparts in 2020, despite a market downturn. Their strong ESG performance is also valued by investors and leads to preferential treatment compared with low performing companies.
Example ESG in OGSM
The company demonstrates how they consider climate change, carbon emissions, air and water quality, deforestation, energy efficiency, waste management, pollution, biodiversity, and natural resource conservation. They provide the actions the company takes to manage the environmental impact of their business.
Example Environmental plan in OGSM
Environment tends to get most focus in an ESG plan, this is also the case with Vesteda. They not only have an extensive Environmental plan in OGSM, but also have developed two underlying environmental plans, one for Climate Mitigation and one for Climate Adaption. Climate Mitigation is focused on CO2 reduction and reducing the CO2 footprint. Vesteda had a lot of plans and actions. But what were they actually contributing to the goals of CO2 reduction? Using OGSM helped tremendously structuring all the actions and develop KPI’s measuring their contribution to CO2 reduction. That doesn’t mean there isn’t room for fun actions, like the exploration of growing their own Vesteda forest in a cost-neutral manner to offset CO2 emissions. As Vesteda has those actions up and running, they added the plan of Climate Adaption, to further circularity and assess climate risk for their portfolio. Using OGSM, they integrated their complete Environmental Strategy.
The social criterion provides disclosure of how a company impacts their people, customers and the broader community. It consists of: customer satisfaction, data protection and privacy, labor standards, employee engagement, community relations, human rights, gender and diversity.
Example Social plan in OGSM
Most companies want to invest in social responsibility but struggle to transform aspirational talk into action. The solution for Vesteda was to stay close to their customers, their tenants, and focus on their needs.The example below shows how Vesteda as a real-estate business focuses their Social Strategy on the well-being of their tenants and quality of living and backs their promises with measurable actions as #square meters implemented on our properties and %homes in mid-rental segment to make affordable homes more available.
Governance considers transparency of a company’s business ethic and culture, internal system of controls, practices, and procedures. Factors examined are: leadership, board composition, audit committee structure, bribery and corruption, executive compensation, shareholder rights, internal controls, bribery and corruption.
Example Governance plan with OGSM
Corporate governance should ensure decision-making in the best interests of all stakeholders – including customers, employees, regulators, local communities, and shareholders. Below is an example how Vesteda has developed key strategies for their stakeholders. The strategy ‘transition to green financing’, which execution leads to actual reduction in interest costs and qualification for Green Bond, adds value for their shareholders and shows corporate sustainability is not only about ‘save the planet’ but also delivers in terms of ‘hard cash’.
Become a transparent organization: deliver you ESG with OGSM
Many organizations already convinced their stakeholders by using OGSM to deliver their ESG objectives. We can guide you to make the first steps and provide you access to examples so you can move forward realizing your sustainability ambitions.