Actuality¹⁴⁸

Constructive Dialogues on ESG Issues: Engaging with Stakeholders

CLIMATE RESILIENCE

Par

Alyssa Boily-Simard

JCCM

Today, many organizations are aware of the importance of moving towards sustainable and responsible practices. In this respect, it has become essential to integrate environmental, social and governance (ESG) criteria into corporate strategies. However, one challenge remains: how to engage in constructive dialogue with stakeholders on ESG issues. In this article, we look at the various approaches and key moments for initiating constructive dialogue.

To better introduce the subject, Anne-Josée Laquerre, General Manager and co-initiator of Québec Net positif, and Rachel Lefrançois, Transition and Sustainable Development Coordinator at Québec Net positif, were keen to recall the importance of the three fundamental axes of the ESG acronym, which stand for Environment, Social and Governance respectively.

The environmental aspect concerns the impact on natural resources and financial sustainability. The social aspect covers relations with stakeholders. Finally, governance mainly concerns compliance, ethics and organizational structure. These interconnected aspects promote sustainability and the creation of long-term value for all stakeholders involved.

Anne-Josée points out that there are always two angles to every aspect of ESG, despite the multitude of issues to be taken into account.

Take the environment, for example. We can observe two distinct angles: firstly, the company's impact on climate change, involving the measurement of greenhouse gas emissions, the implementation of actions to reduce its ecological footprint, and so on. The second angle concerns the impact of climate change on the company itself.

This dual materiality creates a number of challenges when it comes to engaging in dialogue with stakeholders. How can we make an informed choice in this context? It is essential to take into account the specific characteristics of our organization and the sector in which it operates, in order to analyze the relevance of these different issues. This will enable us to identify the most important issues and focus on those that have the highest priority.

Catalyzing climate action: pressures and opportunities for businesses

In Quebec, 82% of companies take ESG-related action. When it comes to defining the type of action, climate action receives significantly less attention than social action, for example. It's therefore an important subject for organizations to address.

Against this backdrop, Québec Net Positif wonders what pressure is being exerted on Quebec companies to implement climate action.

Thanks to a barometer of companies' ecological transition, Québec Net Positif discovered that the main source of pressure for Quebec SMEs comes from within, more specifically from employees. For large companies, on the other hand, pressure comes mainly from legal and regulatory standards, followed by pressure from customers and competitors.

Against this backdrop, what are the key moments and opportunities for generating constructive dialogue with your stakeholders on the various ESG aspects and encouraging action? Here is a non-exhaustive list of opportunities:

-When your organization acquires new equipment (office supplies, computers, etc.);

-When your customers' requirements change, check with your suppliers to ensure responsible sourcing;

-Involve and consult customers in climate action, and prioritize local purchasing;

-Question the company's raison d'être;

-Engage management to facilitate change and positive impacts.

The Greenwashing phenomenon

When your company speaks out publicly, as an employee, you find yourself an ambassador of sorts. We are currently seeing companies taking a very positive stance on their environmental actions, while their operations are not aligned to the same level. This creates a gap between public discourse and reality, which can diminish confidence in general. This phenomenon is often referred to as "greenwashing".

According to the Québec Net Positive Barometer, only 18% of business leaders are able to explain greenwashing in their own words. It is essential to note that most people who practice greenwashing are unaware that they are doing so. A collective effort is therefore needed to better understand this concept, recognize it and be able to engage in constructive dialogue in order to take positive action in this regard.

Main barriers to action

The obstacles to adopting eco-responsible practices have been the same for many years. They include lack of financial resources, lack of time, lack of information on the subject, and many others. However, implementing eco-responsible actions can help mitigate or even partially eliminate these obstacles. These include

Stimulate employees' sense of pride and belonging;
Create and offer products, solutions and services that meet new market needs and expectations;
Position ourselves as an employer of choice and attract new talent;
Reinforce the company's brand image and reputation;
Position itself as a supplier of choice, preserving and consolidating relationships with customers and major principals.

A behavioral perspective on the ecological transition

Ghina El Haffar, a postdoctoral researcher at McGill University, offers a behavioral perspective essential to the ecological transition. She examines the issue of integrating the environmental axis into a company's strategy and vision. For this to be genuine and truly integrated into the company, it is essential to take into account the human factor, adding motivation and proactivity to the environmental aspect.

However, for every change in behavior, some form of resistance is encountered. This resistance is often linked to psychological barriers that prevent action.

Two types of barrier to action were raised:

1. The psychological cost, which refers to the mental strain a person endures in the face of the intangibility of the effects of climate change, which are often difficult to counter with concrete action. This constant uncertainty can lead to fatigue and emotional overload.

2. High variability between employees, which refers to the fact that each individual approaches ecological transition and environmental action in a different way. As a result, employees within an organization may find themselves at different levels of familiarity with the subject.

To counter these barriers, solutions are possible.

Bank of ideas: A behavioral approach can be used to encourage employee commitment to the ecological transition. A simple but effective initiative is to set up an idea bank, based on existing employee skills. This reduces potential obstacles and frustrations. Employees who are more advanced in their careers can share their knowledge and information with others.

Tailored involvement: To cope with the wide variation between employees, a tailored involvement approach can be adopted. This approach aims to provide guided and sustainable support, enabling employees to have autonomy of choice in their involvement. This enables us to take into account different skills, interests and levels of familiarity with the subject, to ensure that involvement is tailored to each individual.

Toolbox

Complete presentation of the Québec Net Positif conference;
Webinar on greenwashing;
Link to ECPAR (Espace québécois de concertation sur les pratiques d'approvisionnement responsable)
Would you like to consult content designed to simplify and popularize behavioral science concepts to help you take action? Ghina El Haffar's initiative is for you!