No matter where your company is in its sustainability journey, the sooner you join or initiate collaborations with industry peers, the better. Every sustainability professional should carry this guide with them when defining an ESG strategy.
After decades of trying to achieve sustainability on their own, more and more businesses are finding that working in isolation is simply impossible; only by acting in concert with other industry players can they make meaningful progress. While it is entirely possible to make incremental moves in areas that your business controls and directly influences, your organization will soon encounter challenges that it cannot solve on its own. sustainable supply chain? Closing the cycle for the product? Mobilizing consumers for sustainable behavior? All these and many more ambitions can only be effectively addressed through business collaboration.
Thankfully, the new guide has been Canadaof Mars Exploration Area, North AmericaThe largest urban innovation hub with a mission to help innovators create a better world. Funded by the Government of Canada, MaRS has developed guidance for businesses that recognize the need to collaborate with industry partners—even peers and competitors—to accelerate sustainable solutions. “Business-led ESG collaboration: A business how-to guide” is a roadmap for businesses looking to start or join an initiative to co-create sustainable solutions and emerge from the sustainability downturn. (Note: This guide was co-authored by the authors of this article.)
Uniquely, it includes a listing of nearly 100 global ESG collaborations that businesses can search to find potential alliances in industries they can join immediately. It also presents 12 case studies of successful collaborations for inspiration.
What is business-led ESG collaboration?
The guidance defines business-led ESG collaboration as a group of businesses in the same industry or across an industry value chain that voluntarily join forces to address their social and environmental risks and impacts. They invent and together create a sustainable path for their industry. They share risks, responsibilities, resources and interests and adhere to a common decision-making process.
Development and alignment of brand objectives
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Research conducted for the guide shows that common areas of focus for business collaboration include:
The ESG Partnership employs different strategies to improve the ESG performance of its members. For example, they:
Improve the social and/or environmental practices of the industry
Advancing product reformulation and innovation in the product value chain
Transform the systems in which industries operate so that they are more in line with planetary boundaries and fair, prosperous societies.
How does your business benefit?
Businesses can benefit greatly by working with others in the industry to achieve shared ESG goals and overcome barriers together. Check out the list below to raise your case internally for collaboration.
Leverage size: Through economies of scale, companies can leverage their broader reach and influence to achieve successful, more impactful and lasting ESG outcomes.
Pool resources: Businesses can mobilize and pool resources to solve problems together when there is a lack of resources to solve on their own.
Access assets: Industry collaborations enable businesses to access each other’s networks, skills, technologies, physical assets and expertise.
Share the risk: By collaborating, businesses can share the risks of new approaches with their peers.
Shape Standard: Business collaborations can create or influence industry ESG standards.
Improve efficiency: Addressing ESG issues and engaging key stakeholders through collective action is less resource- and time-intensive; some stakeholders may prefer to work at the sectoral level rather than working with a single enterprise.
Manage risk: ESG issues can pose significant risks to businesses and their value chains. By working together, departments can identify and respond to risks together.
Build your reputation: Collaborating on shared ESG issues builds industry trust, credibility and reputation, and helps build the social license for the industry to operate and grow.
Measure expectations: Collaborative ESG leadership can meet the expectations of employees, investors, customers, regulators and communities.
Affect Policy: By collaborating, businesses can shape, influence and prepare for government ESG regulation; business collaborations are more likely to influence decision makers than any one organization.
Attract capital: ESG collaboration can leverage and stimulate government and philanthropic funding (eg, foundations and donors).
Build relationships: ESG collaboration can build positive government and stakeholder relationships.
Attract partners: Industry ESG leadership can attract partners with the same goals as the program and can provide ESG with funding, insights, expertise, networks and other capabilities; thus increasing the likelihood of action on an issue.
Demonstrate leadership: Industry ESG collaborations can demonstrate corporate ESG leadership on a provincial, national and global scale.
Accelerate innovation: Industry cooperation can unlock market opportunities across the industry.
Steps to implement ESG collaboration
These are some of the common steps companies take to assess partnership opportunities and then convene and mobilize industry partners.
ESG Practices for Business Partnerships
Below is a list of paths ESG collaboration can take to build industry or partner capacity to address challenges and opportunities together. Industry associations can also use the tool to help their members make progress on ESG. (The SDGs in the graph below refer to United Nations Sustainable Development Goals.) It is divided into basic, foundational practices, beginning with consulting, information, and education; and advanced practices, in which collaboration employs long-term goals, standards, and metrics to steer organizations toward sustainability.
How does this work in practice?
Among the 12 case studies in the guide, an example is Canadian Sustainable Beef Roundtable (CRSB). It was established in 2014 to “meet the desire to collaboratively define, discuss and improve sustainability in Canada’s beef industry. The founding members of the CRSB had a vision to create a space where beef producers, processors, agriculture and Produce businesses, retail, food service companies, government, researchers, academic institutions, animal care and environmental organizations can continuously collaborate on a common goal to improve the sustainability of Canadian beef production.” As the Canadian Sustainable Beef Forum, the CRSB allows participation All stakeholders in the beef value chain collaborate to develop environmentally, socially and economically responsible beef products.
In its early years, it adopted the Five Principles of Beef Sustainability developed by the United States. Global Sustainable Beef Roundtable: Natural resources, people and communities, animal health and welfare, food, efficiency and innovation. Its focus areas are Greenhouse Gas (GHG) management, carbon sequestration, wetland and habitat protection, food loss and waste, animal welfare and antimicrobial use.To guide its members in adopting sustainable development practices, the Roundtable developed a Certified Sustainable Beef Framework.
Based on this standard, the CRSB has created an industry benchmarking tool, namely
National Beef Sustainability Assessment. This helps measure the environmental, social and economic performance of the industry and highlights areas where the industry is performing well and needs improvement. Using this benchmarking tool, it found that Canadian industry’s greenhouse gas emissions are about half the global average, showing the success of their collaboration. The roundtable has now agreed on a National Beef Strategy for 2022-2024, which includes a set of 10-year goals to continuously improve how cattle are raised and the natural environment under the care of meat farmers and ranchers.
No matter where your company is in its sustainability journey, the sooner you join or initiate ESG collaborations with industry peers, the better. The benefits are numerous, but so are the risks and costs of going it alone. Every sustainability professional should have this guide when it comes to defining an ESG strategy—not just for putting companies on a sustainable path, but the industry as a whole. Doing so is critical to ensuring a sustainable future for all.