In a recent conversation with our member CEOs, Professor Robert Kaplan of Harvard Business School advised companies to turn away from the advice of those outside their business on what and how to measure ESG. Instead, he encouraged executives to look inside.
When CEOs actively listen to their employees and their organizations’ trusted customers and partners, the measures that matter will emerge. This approach will help leaders identify the ESG dimensions that will create value for their business and distribute ownership into their organizations.
As Barbara Humpton, CEO of Siemens USA, told our team, “We recently established a new ESG strategy that sets targets in decarbonization, ethics, governance, resource efficiency, equity, and employability—our DEGREE program. This puts sustainability at the center of all of our investment decisions, and we really want to keep digging into the subject of how to measure nonfinancial targets that are so essential to our success and long-term health. We’re not there yet, right? None of us in business are, but there is so much learning going on right now. That has to be one of the key areas we focus on.”
Siemens is working to target the human dimensions of ESG, and is creating a culture that fosters equity by encouraging employees to speak up, managers to have courageous conversations and take courageous action, and leaders to hold themselves accountable for meaningful commitments. The company has woven diversity, equity, and inclusion (DEI) through its employee training, cultural activities and events, and community outreach. And it is transparent with its progress through published rankings such as the Corporate Equality Index (CEI) and the Disability Equality Index.
In late January, Siemens earned a 100% rating on the 2022 CEI, for the third year in a row. This top score goes to companies that have comprehensive nondiscrimination policies, benefits, and practices to ensure greater equity for LGBTQ employees and their family members.
The time has arrived where we can make real progress—within our companies and collectively on a larger scale. So, where to start? Resist the mindset of talking about ESG and, instead, focus on doing. Rather than a massive, detailed plan across all possible ESG measures, find the specific practices that will move the needle on the impact measures that matter most for your organization.