Operating with positive impact

Foreword 9
A word from the editors 11
Editors 12
Authors 13
Contributors 15
Understanding ESG 17

01. Perspectives on today’s world 20
The growing imbalance 22
The rising tension 22
Things. Must. Change. 24

02. A brief history of ESG 26

03. E for environmental 28
What’s behind the ‘E’? 31
The climate emergency: global warming 32
Causes of global warming 34
A primer on energy sources and emissions 41
E for ecosystem 47
What does ‘E for environmental’ mean for companies? 49

04. S for social 52
What’s behind the ‘S’? 54
Towards a definition of the S 56
Beyond employees 56
Diversity, equity and inclusion 57
Social performance and impact assessment 57
When S and E conflict 59
Measuring social performance and impact 60
Social performance and impact reporting 60

05. G for Governance 62
What’s behind the ‘G’? 64
Towards a more comprehensive governance model 65
Compliance and reporting 66
The regulatory universe 67
Changing the mindset 68

06. From ESG to SDG 70
The 17 sustainable development goals and their history 73
The impacts of greenwashing or greenhushing 81
SDGs: a foundation for transformation 81

07. From SDG to circular economy 82
Resource scarcity 84
Circular economy: a first step towards solving scarcity 86
The next step: the spiral economy 88
Interest in circular economy models is rising… 89
6 circular economy critical success factors 91
ESG/circular measures across the value chain 94
How to operate
with positive impact 97

08. A framework for ESG strategy 100
ESG is reshaping the boardroom 102
What is your strategic ambition? 103
Articulating an ESG-focused vision and mission 104
How to assess your ESG maturity… 105
...And your ESG reporting maturity 106
Pledges — A double-edged sword 107
Developing an ESG corporate strategy and a path to execution 108

09. Reporting 114
The origins of sustainability reporting 116
From CSR to NFRD 116
The principal standards and frameworks 117
ESG reporting is no longer optional… 118
...It’s a cornerstone for shifting to a
sustainable economy 118
Europe is the sustainability reporting frontrunner 119
CSRD timeline details 122
US and international standards 123
The reporting requirements landscape is complex 123
How ESG rating agencies play their role 124
Building a robust sustainability reporting framework 124
Technology as an enabler for reporting 127
The ESG technology landscape 128
The future of ESG/sustainability reporting 129

10. ESG transformation in practice 132
ESG is driving the sustainable transformation agenda 134
Embarking on an ESG transformation 137
The 5-phase ESG transformation framework 138
Sustainable governance transformation 139
Sustainable finance transformation 142
Sustainable supply chain transformation 143
Sustainable customer/commercial transformation 152
Sustainable HR transformation 154
Technologies supporting ESG implementation 156
Incentives as a catalyst for ESG transformation 156

11. ESG in transactions 162
What are private equity, pension funds and venture
capital doing? 164
What is industry doing? 165
ESG is increasingly part of M&A processes 165
Six orange flags for dealmakers 169
Preparing the deal: due diligence 172
Executing the deal: acquisition strategy 174
Post-deal integration 175

12. The legal framework for ESG 178
ESG legislation provides a framework for action 181
Compliance benefits and risks 181
Focus on European legislation 182
E from a legal perspective 182
S from a legal perspective 190
G from a legal perspective 193
The key role of legal counsels regarding the G 196
Afterword

7 takeaways on
ESG business transformation 198
Acknowledgements 203

Appendix 1 — ESG software vendor comparison 204
Appendix 2 — List of relevant sources 207

Glossary 208
Endnotes 210