Many investors now consider more than dollars and cents when expanding their portfolios. A company’s environmental, social, and corporate governance (ESG) strategy is essential too. ESG performance informs at least 90% of investors’ decision-making and investment strategy.
As many as 74% will divest from organizations with weak sustainability performance. How can your company show it’s achieving its goals with a sustainability audit?
But how is sustainability audited? And what is in a sustainability audit?
This article tells you this and more. It will also look at using a sustainability checklist and factors to consider in your audit. Read on to find out.
What is a Sustainability Audit?
A sustainability audit assesses a company’s progress in achieving its sustainable development goals. It focuses on the areas of social, environmental, and economic performance. It evaluates whether the resources put toward these goals are being used effectively.
If not, an audit allows you to reassess your targets. You can use the data gathered to formulate more effective solutions.
Ensuring your sustainability is successful will benefit your company in many ways. This includes greater customer acquisition, increased profits, and better employee retention.
How is Sustainability Audited?
A sustainability audit method will look at how companies define sustainability initiatives. It also examines how they execute and monitor them.
The audit will look at the following when assessing how your company defines these initiatives:
- Procedures and Policies
- Executive Oversight
- Awareness and Culture
Examining the execution of these initiatives will involve reviewing the use of data and tools that support sustainability. It will also look at the tracking of regulatory changes. It will include compliance by employees and third parties, among other factors.
When assessing monitoring, the audit will consider the management, investigation, and reporting of any issues that occur.
What is in a Sustainability Audit?
A sustainability audit will consist of three detailed areas. The first should include company investments. It should focus on where and how your company invests. It should indicate if you invest in companies committed to sustainability. It should also note any boycotts of your company due to inadequate sustainable practices.
The second area of the audit should assess your company’s operations. Is your company recycling? Have you implemented programs that allow your customers to recycle?
It should also delve into steps to reduce your energy consumption.
The final area should include customer education about your sustainable practices.
A sustainability checklist will help to ensure you cover all areas. Items on a sustainability checklist and factors to consider should include:
- Your social impact on employees and society
- Infrastructure and support for sustainability program development
- Environmental impacts
This includes environmental impacts in procurement, product development, waste reduction, and resource conservation.
Getting Your Sustainability Program Right
How is sustainability audited? We hope this guide has helped you know more and understand why it is so important.
Businesses probably play the most crucial role in the social, ecological, and economic environment. They must implement sustainability initiatives that benefit society. But these initiatives must be more than items written on paper.
They must be effective and continually monitored and adjusted. A sustainability audit can help you do this. But you don’t have to do it on your own.
Phase Associates can help. We can help you plan for a sustainable future. Contact Phase Associates to find out more about our services.
We service the states of New Jersey, Connecticut, Pennsylvania, New York, Georgia, Delaware, Maryland and Virginia.
If interested, browse our blogs in our navigation to learn more about other environmental news. We list just a few below.