ISRI2022: The growing importance of ESG in business success

ISRI2022: The growing importance of ESG in business success
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Companies increasingly are focused on environmental, social and governance (ESG) criteria, particularly as investors and other stakeholders, as well as consumers, judge the performance of a company and its level of sustainability based on these factors.

“I think especially in our industry, though, it’s really been about the environment,” said Susan Robinson, senior director of sustainability at Houston-based WM. “Not only do investors measure how we are doing with [ESG criteria], but now increasingly our customers, our employees and our regulators consider ESG metrics when they’re evaluating companies, and they expect good ESG performance,” she added.

Robinson and a panel including Luba Shabal, director of impact due diligence at Closed Loop Partners; Marie Hache, director of ESG at PwC; and John Shegerian, chairman and CEO of ERI, spoke during the Institute of Scrap Recycling Industries (ISRI) 2022 National Convention and Exposition, which took place March 20-24 in Las Vegas.

Rob Ellsworth, director of sustainability at Schnitzer Steel Industries Inc., based in Portland, Oregon, said sustainability can mean something different to each individual company. Generally, it refers to an entity’s ability to consistently create and protect value over the long-term and includes support of human ecological well-being, health and vitality over time. More broadly, it’s used to describe a company’s efforts to reduce its impact on the world. Ellsworth, who also spoke at the ISRI convention, added that ESG refers to specific risk factors, impacts and value-creation opportunities.

As a company begins to address sustainability factors, it should start by assessing available resources, identifying the values it holds most closely, and developing a strategy that it communicates with stakeholders. It also should report on progress over time.

“There’s a growing understanding—and there’s data to support it—that profit is impacted by how we manage our business, by our impact and on the environment, how we treat our employees and how we impact the communities in which we work,” Robinson said. “I think in the recycling industry this is really important for us to realize [and] to be planning for the 360-degree view. Taking care of people and the environment makes good sense.”

She added, “Our houses just simply have to be in order. We’re held accountable for all aspects of our business, whether our companies are privately or publicly held. Investors, customers, regulators [and] employees are increasing their expectations for how we operate and how we provide information about our operations, as well.”

Hache, whose company PwC, works as an auditing and consulting service firm headquartered in London, said when it comes to ESG and sustainability, it’s important to build trust in society by showing that companies are not just about the financial return but also are considering and understanding the impact they have on the environment, on society [and] on employees and how all of that together helps them be a better company.

“Yes, [that allows companies to] be more competitive, perform better and drive better revenues,” she said. “But [it also helps] them think through this ‘E’ and ‘S’ function and also the governance side in a way that helps them perform longer-term.”

Hache advised companies to determine what ESG principles are most relevant to them and that align better with their mission. “Environment, for sure,” she said, “[but] what are those environmental themes that are relevant to your company? It might be climate or greenhouse gas emissions. It might be waste streams … it might be water [or] biodiversity.”

When it comes to the social aspect of ESG, Hache said that can involve employee satisfaction training, upskilling, retention, diversity and also the supply chain, while governance can include ethics and compliance around board management, financial regulations and cybersecurity.

“It’s one thing to have [these programs] internally and have good programs and initiatives,” she said. “But, at the same time, you want to be able to communicate [that information] to the world in a way that is relevant and credible.”

As did Hache, the other panelists noted the importance of reporting ESG reporting accomplishments and goals to investors and stakeholders at every stage.

Shabal said the recycling industry is more fortunate than most in that many recyclers already have the necessary data available for an organization like New York-based Closed Loop Partners to analyze, including the flow of material and where it goes when leaving a facility.

“In the recycling space, that’s a fortunate thing that we have a lot of information on our hands,” she said.

Shegerian, whose company ERI, Fresno, California, deals in electronics recycling and information technology asset disposition (ITAD) services, said that when it comes to business practices, ESG is a trend that is not going away.

“This is maybe one of the most important investment and generational trends that we’re going to see in our professional careers,” he added. “For those companies that embrace the shift from linear to circular economy and who embrace the principles of ESG behavior—good ESG behavior, responsible ESG behavior—not only will they be rewarded with huge amounts of capital that are [already] available to those who are like-minded, but also greater opportunities on the sales side when you’re acquiring business and growing your revenue.”

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Source: Recycling Today
ISRI2022: The growing importance of ESG in business success
<![CDATA[Companies increasingly are focused on environmental, social and governance (ESG) criteria, particularly as investors and other stakeholders, as well as consumers, judge the performance of a company and its level of sustainability based on these factors. “I think especially in our industry, though, it’s really been about the environment,” said Susan Robinson, senior director of sustainability at Houston-based WM. “Not only do investors measure how we are doing with [ESG criteria], but now increasingly our customers, our employees and our regulators consider ESG metrics when they’re evaluating companies, and they expect good ESG performance,” she added. Robinson and a panel including Luba Shabal, director of impact due diligence at Closed Loop Partners; Marie Hache, director of ESG at PwC; and John Shegerian, chairman and CEO of ERI, spoke during the Institute of Scrap Recycling Industries (ISRI) 2022 National Convention and Exposition, which took place March 20-24 in Las Vegas.Rob Ellsworth, director of sustainability at Schnitzer Steel Industries Inc., based in Portland, Oregon, said sustainability can mean something different to each individual company. Generally, it refers to an entity’s ability to consistently create and protect value over the long-term and includes support of human ecological well-being, health and vitality over time. More…