Environmental, Social and Governance (ESG) in Field Service
Every business is ultimately intertwined with the rest of the world. There is no action a company can take that does not have a direct or indirect impact on communities and the environment.
Furthermore, recent events have only reiterated the importance of corporate responsibility. The public now expects companies to formulate a direct stance on social issues and to be transparent about their financial dealings, environmental impact, and employee culture.
Field service organizations are no exception. Now, a strong ESG proposition is a must-have for every field service organization.
Identifying ESG in Field Service
The three elements of an ESG policy are environmental, social, and governance criteria.
Environmental criteria include any impact the organization has on the environment and local ecosystems. In the field service industry, this can be attributed to the fuel the company’s service fleet uses, the emissions the company produces, and waste the company generates through its operations, among other things. Every company uses energy resources and produces an impact on the environment, so they must hold themselves accountable to their own pollution reduction goals.
Social criteria refer to the relationship the company has with the wider community, as well as any other institutions with which it does business. Most companies also consider the way it treats employees a social criterion. Companies with admirable social policies promote diversity and equity in the community and internally, and they extend their policies to contractors, vendors, supply chain partners, and others in their networks.
Finally, governance criteria include all the systems and processes the organization uses to make decisions. For the field service organization, strong governance policies enable the business to establish a hierarchy of decision-making, comply with laws, and meet the needs of stakeholders like investors. They also enable the organization to identify and rectify policy violations quickly.
There are numerous benefits to a strong ESG platform, not least of which is that it allows the company to have a positive presence in the community.
However, according to an article by McKinsey & Company, strong ESG policies correlate with positive returns for the business. Based on a review of over 2,000 studies on the topic, McKinsey found that 63% of ESG propositions yield returns for companies.
ESG programs are also important to investors. Shareholders are increasingly interested in how their investment dollars impact communities and the environment, and many are willing to part with companies that don’t meet their standards.
Implementing ESG in the Field Service Industry
Like other goals, implementing a new ESG strategy starts with setting standards, identifying areas that need to be improved, and outlining measurable outcomes that will define success. Field service organizations should analyze their current operations and benchmark the results against industry ESG standards. Investor relations can also be a source of insights, as shareholders may have thoughts about how the company can improve.
From there, decision-makers can develop a program and timeline for meeting or exceeding those standards. ESG programs typically require a budget and a dedicated leadership team, as someone within the organization must take responsibility for success. However, ESG should be an ongoing objective for the organization, so standards should be reviewed and updated regularly.
To learn more about how ESG is evolving in the field service industry, don’t miss the next Field Service conference event, happening at the JW Marriott in Palm Springs, CA from April 26th to April 28th, 2022.
Download the agenda today.