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June 18, 2024

ESG best practices in business

Incorporating environmental, social and governance (ESG) issues into company activities is becoming essential. Primarily for the planet’s benefit, but also increasingly to maintain a competitive edge. What concrete action can companies take to promote sustainable development? Let’s take a look at best practices with myLIFE.

What is a responsible business?

Being a responsible business means taking into account the impact of your activity on the planet and its inhabitants. This means taking measures to limit your negative impact while also increasing your positive environmental impact, ensuring economic growth, and demonstrating concern for your employees’ wellbeing.

As an entrepreneur, you also have a part to play in meeting the UN’s Sustainable Development Goals. While in the collective unconscious the approach is above all environmental, incorporating ESG (environmental, social and governance) criteria into company strategy also helps to anticipate future regulatory changes and sharpen your competitive edge. In this way, you create opportunities to better respect the environment, enhance productivity and improve employees’ quality of life, while potentially boosting the company image and better responding to the expectations of clients, shareholders and suppliers, etc.

All companies can contribute to sustainable development by applying practices that are more respectful of the environment and people.

What are the ESG best practices in business?

All companies can contribute to sustainable development by applying practices that are more respectful of the environment and people. Your involvement can take different forms depending on the size of your organisation, your industry and your financial resources. Rather than simply copying your neighbour, engage in dialogue with all of your stakeholders to better identify the areas of sustainable development on which your activity has the most impact: pollution, energy consumption, employee working conditions, local development, etc. Social dialogue is key to identifying areas for improvement and implementing a CSR strategy (corporate social responsibility) suited to the context of your company. Here are a few examples of ESG best practice to give you some inspiration.

Reduce your carbon footprint by taking a few easy steps or more sizeable initiatives: turn off the lights and heating when employees are absent, turn off electronic devices when not in use, limit the sending of emails and attachments that are too large, set thermostats to the optimal temperature range, opt for energy-saving light bulbs, improve thermal insulation of walls, windows and roofs, regularly check that technical installations are in good condition, install heat pumps, choose a renewable energy supplier, install photovoltaic panels, strive to offer local and seasonal food in your company canteen, etc.

Reduce the volume of waste you produce: sort your waste by category by installing dedicated bins, establish a recycling scheme, opt for reusable tableware, remove unnecessary packaging, provide glass containers, buy products in bulk, reduce paper consumption by printing double-sided, using recycled paper or going paper-free, and set up partnerships to give unused products a second life, etc.

Promote employee well-being: establish teleworking days where possible and regularly offer your employees training to increase their skills, optimise work spaces (provide ergonomic furniture, adequate lighting, green plants, etc.), make premises accessible to people with disabilities, comply with labour law, and health and safety rules, ensure gender parity and diversity within the company and its decision-making bodies, put in place an accident prevention plan, implement working time arrangements, promote the employment of young and older people, encourage good health practices by providing your employees with a gym, and healthy food options, etc.

Encourage more responsible travel: encourage your employees to use public transport, carpooling, car sharing or cycling, set up shuttles for commuting, offer self-service bicycles or install a bicycle park on your premises. Incentivise the use of environmentally friendly means of transport, replace your fleet of thermal vehicles with electric vehicles, etc.

Promote a circular economy: repair rather than buying new, set up partnerships to recycle or donate old devices, opt for reconditioned products or second-hand equipment, etc.

Buy and produce responsibly: promote short supply chains, choose local suppliers with sustainable practices, reduce the use of raw materials when designing products, extend their lifespan or design a recycling scheme, avoid the use of pollutants, ensure respect for human rights and environmental standards throughout your production chain, etc.

Engage in social initiatives: establish partnerships with local communities, support humanitarian missions, participate in social or environmental projects, make charitable donations, etc.

Ensure good corporate governance: draw up a governance charter, ensure the independence of your Management and Board of Directors, uphold gender parity and diversity in management teams, adopt a fair remuneration policy, fight against corruption, meet your tax obligations, etc.

Raise employee awareness: organise awareness-raising workshops and conferences on sustainable development, conduct surveys to identify your employees’ needs and desires in terms of CSR, incentivise the reduction of paper and energy consumption through games, etc.

Use indicators to monitor the progress of your initiatives: company carbon footprint, energy and water consumption, waste production, absenteeism, etc.

Measure your results regularly: use indicators to monitor the progress of your initiatives: company carbon footprint, energy and water consumption, waste production, absenteeism, etc.

Promote your sustainable development initiatives: share information about your CSR initiatives internally and externally, show your commitment by applying for certification, be transparent with your stakeholders about the origins of your products, how they are manufactured or what they are made of, etc.

If you are having difficulty incorporating ESG issues into your company’s habits, note that there are tools to facilitate your transition: Energy: removing the barriers to change in business.

Examples of CSR initiatives at a bank

Banque Internationale à Luxembourg (BIL) is rolling out numerous initiatives to address ESG challenges in the products and services it offers, in its operational processes and in the management of its human resources. Its sustainable development strategy is based on four pillars: governance, products and services, responsibility as an employer and the impact on communities and the environment.

Among the actions implemented in terms of sustainable products and services, it offers a series of green loans and support for obtaining state aid, aimed at supporting clients in their transition to becoming more energy efficient. The bank is cutting its energy and paper consumption by developing its digital communication tools and also offers responsible investment funds to its clients, six of whom, at the time of writing, have obtained the LuxFLAG ESG label.

For the well-being of its employees, it offers a complete training programme through the BIL Academy, and provides funds and allowances for their specific needs (children’s education, family events, etc.). It has a fitness centre, promotes inclusion and diversity in the company (it is also a signatory of the Diversity Charter), and regularly organises activities to raise awareness about sustainable development, for example by providing tools that allow everyone to measure their own carbon footprint.

In order to expand the positive impact it has on the environment and communities, the bank has installed LED lighting in its offices, it processes its waste and maintains a selective collection system. This has enabled it to obtain the SuperDrecksKëscht label. BIL is also a signatory to the “Zero Single-Use Plastic” manifesto of IMS Luxembourg and it provides financial support to local NGOs, charities and organisations related to the environment, health and education, etc.

Finally, BIL has defined its corporate governance in a charter and incorporated ESG factors into its risk management policy. BIL is structuring itself around its regulatory transparency obligations: the Sustainable Finance Disclosure Regulation (SFDR), the Corporate Sustainability Reporting Directive (CSRD) and the European Union Taxonomy Regulation. In addition, BIL is committed to working towards the goals of the United Nations 2030 Agenda for Sustainable Development and has signed the UNEP FI (United Nations Environment Programme Finance Initiative) Principles for Responsible Banking and adheres to the principles of the UN Global Compact.

To find out more about all the ESG initiatives implemented at the bank, please consult the Sustainability section of the BIL website.

To be effective, action to promote a sustainable transition must be collaborative and meaningful for everyone.

To conclude, it should be emphasised that for ESG issues to be successfully incorporated into a company’s activities depends not only on the will of its managers, but also on the real involvement of its employees and stakeholders. To be effective, action to promote a sustainable transition must be collaborative and meaningful for everyone.