An ESG Vision Statement is the first step to committing a business to sustainable practices and ensuring it continues working towards those long-term ambitions as it grows.
ESG (environmental, social and governance) spans a diverse range of issues, from climate change to workplace conditions and corruption. While most Australian business leaders, workers and investors now actively seek to address these issues, no two organisations are alike in how they address and prioritise ESG.
KPMG High Growth Ventures helps startup founders build high-performance businesses by connecting them with specialist teams like KPMG Sustainability Services, which advises on best practice approaches to ESG.
According to KPMG Climate Change and Sustainability Services Director Mark Spicer, an effective Vision Statement helps startups meet the needs of their various stakeholders, and serves as a concrete foundation for more specific targets.
“The idea is we have an ESG strategy that meets the needs of all of our stakeholders,” Spicer explains. “The whole idea is that we’re consistent and we can identify those key topics and tell that story consistently across our business.”
Setting and communicating your level of ambition
An ESG Vision Statement is a high-level aspirational statement that determines an organisation’s level of ESG ambition and communicates this to stakeholders and the wider market.
According to the KPMG 2021 CEO Outlook, businesses have focused increasingly on their corporate purpose statements in making key business decisions since the pandemic. Almost all Australian CEOs (98 per cent) now say purpose drives their financial performance, and 94 per cent say following through with corporate purpose commitments will shape their capital allocation in the years ahead.
To develop a Vision Statement, Spicer and his team recommend that startup founders identify the ESG trends and issues relevant to their products and services, and determine the level of ambition that is achievable for them.
For example, an ESG follower may “seek to transition towards carbon neutrality and net zero emissions by 2050”, while businesses with an average level of ESG ambition might “operate in a sustainable and ethical way and bring a social conscience to all business decisions”.
Australian ESG leaders currently include those who commit to “leading the evolution of our industry to be truly sustainable” and are “driven to make a difference … creating positive outcomes for all”.
These Vision Statements in turn determine which ESG factors a business should track and which KPIs and metrics to use for performance reporting.
“Sometimes the big corporates that we work with would be very aggressive in this space, but for some startups, possibly at this point in time, you might not have the resources or people with the correct knowledge to tackle this,” says Samantha Bayes, Associate Director, KPMGClimate Change and Sustainability Services.
“The reason an ESG Vision Statement is important is twofold: firstly to communicate your vision and level of ambition with key investors, customers and employees; and also to ensure this improves over time. Going forward, you might want to move to becoming an ESG leader, and that might change the way you communicate to investors, for example.”
KPMG High Growth Ventures is a high performance advisory group designed to nurture the personal and professional growth of Australian founders and their businesses. Designed for startups and delivered by specialists, KPMG High Growth Ventures provides specialist advice across international expansion, capital raising, maturing finance capabilities, R&D, accessing government grants and more. Get in touch today to find out more Highgrowthventures.com.au
