ESG Measurement Best Practices For a Private Company by Carley Stephens
What is “ESG?”
The term “ESG” (environment, social, governance) is a somewhat new concept in the corporate arena, especially the metrics that are now tied to this work. Purpose driven companies, corporate social responsibility professionals and nonprofits have been ‘doing’ ESG all along. However, it may have been called something else like CSR, Corporate Citizenship, Community Affairs, etc. In my opinion, we have simply combined corporate efforts in a different way and set an expectation of measurement around it.
According to Accelerist’s recent report, “The Impact of ESG Metrics on Bottom Line,” 54% of S&P 500 companies published ESG data in 2020, a 37% increase from 2019. It’s getting serious.
ESG at Gas South
Gas South is a leading provider of natural gas in the Southeast. We operate in 14 states and have offices in both Georgia and Florida. We are also a privately held company with no shareholders and, therefore, no mandatory ESG metrics to report on. So, why am I writing this blog? Good question.
Although ESG measurement is not required for our company, that does not mean that it is not valuable. We do not have shareholders, but we have plenty of stakeholders and many of them are interested in how Gas South is being a good corporate citizen. When it comes to consumers, 84% of global consumers consider sustainability important when choosing a brand [Sustainability at a Turning Point, IBM, 2021] and 66% of employees report a greater sense of loyalty to their employers as a consequence of participating in CSR programs [“Closing the Racial Inequality Gaps” Citi, 2020]. Most C-Suite executives acknowledge that doing good is good business. So, how does a private company “choose” what should be measured?
Always ask: Why? In service of what?
I have been a CSR professional for 6 years in my current role at Gas South, and before that, as a fundraiser in the nonprofit world for more than 5 years. The landscape has changed dramatically. I used to measure things like volunteer hours, number of youth ‘served’ (whatever that means), and dollars given back. As this space evolves over time, I find myself asking “why” and “in service of what” more frequently. For example, why do we measure volunteer hours? What do we hope to accomplish with that metric? Should we communicate it externally and, if so, for what reason? If we use this data to help drive employee engagement strategy, then it may be worth measuring. If not, is it just a waste of time?
I am currently asking these questions when it comes to ESG. What are publicly traded companies being required to measure and of those things, what should we measure? Why? In service of what? I am conducting internal conversations with our stakeholders to find out more about their own experiences with ESG – are potential customers asking the sales team about ESG reporting during a pitch? Are customers asking us our CSR score? Where are we falling short in our score? Where do ESG metrics really impact our business?
Gas South is just beginning our journey on ESG measurement, but here are few things we have done so far to move in that direction.
- We had an outside consultant conduct an ESG Gap Analysis for us. This gave us great insight into where we currently fall short and some “easy” action items that we can address. Things like translating more of our marketing materials into Spanish, establishing a sustainability committee, and integrating our solar investments with social impact are a few of the suggestions.
- We are getting engaged in things like the DrawDown Georgia Compact, whose goal is to pursue innovative solutions to achieve net-zero greenhouse gas emissions by 2050 and address “beyond carbon” sustainability elements of equity, economic opportunity, community health, etc.
As Gas South continues to develop our own ESG strategy, we will also evaluate the ESG measurements that we believe will have the most impact. I believe that we should definitely do the things suggested above and start looking at our supply chain – where are we purchasing natural gas? From who? Are they being socially responsible? Are there ways that Gas South can support minority owned businesses? Who do we use for catering? Office supplies? Promotional items? These things matter when it comes to ESG measurement, and these are some of the areas that I personally believe are worth measuring. These are the areas that I believe could make an impact on our stakeholders.
I would argue that it is almost more difficult to be a privately held company in this time of ESG measurement – some days I would much rather have someone tell me exactly what needs to be measured with no questions asked. Then I read this huge, complicated, 132 page ESG report like Truist 2021 ESG and CSR Report and think, nah, I’m good.
Carley Stephens is the Manager of Community Affairs at Gas South. She manages the company’s corporate citizenship strategies which include philanthropic giving and employee community engagement. Carley has over 8 years of non-profit experience, most as a Lead Development Officer for United Way of Greater Atlanta. She has a passion for connection, collaboration, and innovation.
Before discovering her calling in Corporate Citizenship, Carley spent time as an Association Executive for the Board of Realtors, a head bank teller and a kindergarten karate instructor, aptly named the Tiny Tigers.
In addition to being a jack of all trades and master of none, she is a wife to husband Tony and mother to 3-year-old, Everly. She enjoys reading, cooking, entertaining and coffee, especially hot coffee, which doesn’t happen often with a 3-year-old. Carley graduated from Calvin College in Grand Rapids, Michigan with a degree in Philosophy and is an avid Michigan Wolverines football fan.