ESG Series: Understanding and Improving Sustainability Scores

In this episode of the Assurance in Action podcast, the discussion revolves around sustainability scores and their significance in assessing a company's environmental, social, and governance practices. Sustainability scores, used by stakeholders and regulatory bodies, evaluate a company’s commitment to sustainability. Key points include the importance of analyzing current scores, obtaining feedback from rating agencies, and conducting internal audits to identify areas for improvement.

Actionable steps to enhance sustainability scores include increasing energy efficiency, reducing waste, and managing water usage. The episode emphasizes setting realistic goals and effectively communicating progress to stakeholders through reports and certifications. Tune in for valuable insights on navigating the complexities of sustainability scores and fostering a sustainable future!

Speakers: 

• David Muil- VP of ATIC Sustainability
• Elma Christian- Global Director of Business Development

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Transcript

[Intro Music Fades In] 

Elma Christian (Host): 

Welcome to the Assurance in Action podcast, where we explore the latest trends in sustainability, food safety, and quality assurance. I’m your host, Elma Christian, Global Director of Business Development.  

Today, we’re diving into an essential topic as part of our ESG series: Understanding and Improving Sustainability Scores. Joining me is David Muil, VP of ATIC Sustainability, a seasoned expert with years of experience helping organizations enhance their environmental, social, and governance practices. 

[Music Fades Out] 

Segment 1: Understanding Sustainability Scores 

Elma Christian (Host): 

Before we dive into the solutions, let’s take a moment to break down what sustainability scores are. David, can you walk us through that? 

David Muil (Speaker): 

In essence, sustainability scores are metrics that assess an organization's impact on environmental, social, and governance (ESG) factors. These scores are used by stakeholders, investors, customers, and regulatory bodies to gauge a company’s commitment to sustainable practices. 

Many organizations rely on external ratings provided by agencies like the Dow Jones Sustainability Index, CDP (formerly the Carbon Disclosure Project), or MSCI ESG Ratings. These ratings help stakeholders understand the company’s practices in areas like energy use, carbon emissions, water usage, and social responsibility. 

But if you’re not scoring as high as you’d like, don’t worry! There are tangible ways to improve your performance, and today, we’ll explore just how to do that. 

Segment 2: Analyzing Your Current Score 

Elma Christian (Host): 

Thank you David. Next, let’s talk about the first step to improvement, which is analyzing your current sustainability score. What are some key actions organizations should take? 

David Muil (Speaker): 

Absolutely, Elma. The first step is to take a deep dive into your current sustainability score. Here are a few key actions: 

1. Assess Your Score Components: Identify which areas—whether it’s environmental, social, or governance—are dragging down your overall score. 
2. Get Feedback from Rating Agencies: Reach out to the agency that rated you. Many provide reports that outline areas of improvement, from energy consumption to corporate governance. 
3. Conduct Internal Audits: If you haven't already, perform an internal sustainability audit. Understand your energy use and waste generation. Knowing where you are now is key to where you need to go. 

Segment 3: Key Areas to Improve Sustainability Scores 

Elma Christian (Host): 

Thank you David. So, improve sustainability score, assess key areas, seek feedback and conduct internal audits to understand performance. Now that we know how to assess the current situation, what are some key areas organizations can focus on to improve their sustainability scores? 

David Muil (Speaker): 

There are several actionable steps organizations can take: 

1. Energy Efficiency: Conduct an energy audit to identify areas for improvement. Switch to energy-efficient lighting, update HVAC systems, and optimize production processes to significantly reduce energy consumption. Also, consider renewable energy sources like solar or wind. Many sustainability rating agencies reward companies that embrace clean energy. 
2. Waste Reduction and Circular Economy: Develop waste reduction initiatives aimed at zero-waste programs. Partner with companies that specialize in repurposing materials. Implement circular economy models that extend product lifecycles by designing for recyclability. 
3. Sustainable Supply Chain: Evaluate your supply chain for sustainability. Partner with suppliers who share your sustainability goals and prioritize low-impact production methods. Local sourcing can also reduce transportation emissions. 
4. Water Usage: For water-intensive industries, tracking and reducing water consumption can make a huge difference. Invest in water-saving technologies. 
5. Carbon Emissions: Start by measuring your company’s carbon footprint and set specific reduction targets. Consider implementing carbon offset programs by investing in reforestation or renewable energy projects. 
6. Employee Engagement: Create awareness programs to encourage employees to adopt greener habits. 
7. Governance & Transparency: Share your sustainability goals and establish a dedicated team to oversee ESG policies and report progress regularly. 

Segment 4: Setting Realistic Goals and Targets 

Elma Christian (Host): 

Great insights, David! Now that organizations have identified areas for improvement, how can they set realistic goals and targets? 

David Muil (Speaker): 

Setting achievable goals is crucial. Here are some strategies: 

1. Short-term and Long-term Goals: Break down your goals into manageable timelines. For example, aim to reduce paper waste by 30% in the short term, while transitioning to 100% renewable energy within five years. 
2. Use Benchmarks: Compare your progress with industry standards to measure improvement. 
3. Track Progress with Data: Use sustainability management software or third-party tools to monitor your improvements in real-time. 

Segment 5: Communicating Your Progress 

Elma Christian (Host): 

Very helpful points David. So, once improvements are made, how should organizations communicate their progress? 

David Muil (Speaker): 

Communicating progress is key to maintaining stakeholder trust. Here are some suggestions: 

1. Reporting: Publish sustainability reports annually or biannually to provide transparency. 
2. Engage with Stakeholders: Keep your investors, customers, and employees informed about your sustainability initiatives. Use platforms like social media and corporate websites to showcase your progress. 
3. Certifications: Consider obtaining certifications like ISO 14001 for environmental management, as they add credibility to your sustainability claims. 

Segment 6: Final Thoughts & Wrap Up 

Elma Christian (Host): 

Thank you for those valuable insights, David. As we wrap up, what final thoughts do you have on improving sustainability scores? 

David Muil (Speaker): 

Improving your sustainability score isn’t just about meeting regulatory requirements; it’s about creating a positive impact on the environment and society. As global awareness around sustainability grows, companies that prioritize these practices not only enhance their public image but also contribute to a better future for everyone. 

Elma Christian (Host): 

Thank you David, and many thanks to all for tuning in to this episode of the Assurance in Action podcast! We hope this guide helps you effectively address and improve your sustainability scores. Be sure to subscribe, leave a review, and join us next week for another insightful episode. Until then, stay sustainable! 

[Outro Music Fades In]