Whitepaper

Devising a Roadmap to Meet Corporate ESG Goals:

Clock is Ticking to 2025
by Lisa Wilk & Hunter Richards
capaccio.com Devising a Roadmap to Meet Corporate ESG Goals: Clock is Ticking to 2025

BACKGROUND
As the world moves toward ever-increasing globalization through
complex, multi-national business interests and closely tied
economies across borders—how organizations operate in regard
to Environmental, Social, and Governance (ESG) issues has never
been so important or so in focus. Two main pillars of ESG are the
pressing demands brought by climate change and a heightened
public and regulatory scrutiny toward environmental justice. In
response to these demands, many organizations created ambitious
goals for 2025 and 2030 and now the deadlines to show results are
fast approaching.

Some big brands have set the tone with bold public statements around
targets for their organizational ESG goals. Apple has identified the benchmark
for reaching complete carbon neutrality by 2030, with detailed video and
informational updates included on their site. Not to be outdone, IBM has also
committed to reaching net zero GHG emissions by 2030, while also working
with the European Green Digital Coalition to use their technology to build and
support sustainability goals across a number of priority sectors. Patagonia has
continued to distinguish themselves in both public facing and internal efforts
to be a leader in ESG concerns—going so far as to change how and where they
do business to lessen environmental impact while also creating robust social
responsibility and environmental/animal welfare programs for safe, humane,
and just practice in all they do.

Though these brands represent big name outliers, the work they do and
standards they set around ESG goals have ramifications that filter across the
business landscape. Public perception around brand identity, awareness, and
integrity has never been so in focus. Publicly stated goals are integral to an
organization’s mission and reputation, having a significant effect on gaining

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and reinforcing consumer trust. No longer an ancillary issue for organizations, a

paradigm shift has taken place in the last fifteen years where ESG systems and
practices have begun to carry a direct correlation to overall value of a business.
Ratings based on investment performance in ESG markets and the role of ESG
investment firms have a growing influence on valuations of businesses. The
recent years of supply chain upheaval and pandemic forced corporate stress
testing have made potential buyers/investors look for elastic and sustainable
systems to prove business continuity in the long term.

At the same time of heightened consumer and investor scrutiny, regulatory

requirements have begun to demand more rigorous standards to try to
keep pace with the rapidly growing threats of climate change. Driven by
the compliance regulations of the European Union and “Building on the Paris
Agreement, the EU has committed to becoming the first climate-neutral bloc in
the world by 2050.”1

With the global footprint of so many US companies, the EU’s move from
pledges to regulatory action is having a positive ripple effect across the world.
In an attempt to crack down on corporate Greenwashing, “the US Securities &
Exchange Commission (SEC) announced the creation of a Climate and ESG Task
Force to ‘develop initiatives to proactively identify ESG-related misconduct’ with
a focus, in part, on “material gaps or misstatements” in disclosure of “climate
risks.”2 Under the Biden administration, there is also a potential push to mirror
the more rigorous standards of EU sustainability reporting requirements with the
adoption of a universal reporting framework.

1
Oliwia Berdak, Luis Deya. Forrester, The European Union’s Sustainable Finance Regulation Jigsaw is
Almost Complete. Forrester.com, Oct. 11, 2021. https://www.forrester.com/blogs/the-european-unions-
sustainable-regulation-jigsaw-is-almost-complete/
2
Hunton Andrews Kurth LLP. National Law review, Volume XI, Number 90, Environmental, Social and
Corporate Governance: What are the Risks, Really? Natlawreview.com, March 31, 2021. https://www.
natlawreview.com/article/environmental-social-and-corporate-governance-what-are-risks-really

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The good news for forward thinking businesses is that meaningful ESG
changes have been proven to positively affect overall business performance
and operational cost reduction as well as taking a proactive stance on building
elasticity and long-term stability in systems and processes. Despite all of this,
a new international survey conducted by OnePoll for Navex Global around ESG
issues has demonstrated that while “an overwhelming majority of respondents
in the survey (81%) said their company has a formal ESG program in place,
they did not express a high level of confidence their organization was following
through as measured against their own standards,”3 with only (39%) saying that
company performance is effective in meeting ESG goals.

Too often, ESG goals are not grounded in the materiality requirements within
an organization as a whole. Long-term goals need to incorporate the concerns
and usage requirements of stakeholders from the top down to ensure the
consistent support for the incremental changes required over time. Interim
targets based on process metrics need to be established and worked towards
throughout an evolving progression—keeping in mind and communicating
broadly that meaningful change in ESG is a marathon, not a sprint.

3
Edward Segal. Forbes, Survey: Business Leaders Say Their Companies are Falling Short in Meeting
Environmental, Social, and Governance Goals. Forbes.com, Feb 10, 2021. https://www.forbes.com/sites/
edwardsegal/2021/02/10/survey-business-leaders-say-their-companies-are-falling-short-in-meeting-
environmental-social-and-governance-goals/?sh=3af4a24f62f5

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THE CHALLENGE
For organizations that have already conducted materiality
assessments to establish impactful corporate ESG objectives with
top-level support, the next and possibly even bigger challenge is
to mark meaningful interim targets that set the course to achieve
those necessary, process-driven steps in the climb. Moving beyond
the theoretical exercise of setting targets—creating and then
realizing specific plans to achieve those targets will require teams
with appropriate internal and external expertise to identify and
optimize the projects and initiatives that best align with objectives
to mark an efficient ascent.

Projects need to be assessed and prioritized on ESG impacts as well as

sustainability-based ROI assessments. Additionally, process metrics need to
be identified and tracked to measure progress towards meeting target metrics.
Modelling for the anticipated result of projects needs to be compared to the
actual metrics that are measured and reported in real-time to internal teams
and management alike, so that process adjustments can be made to ensure
that publicly stated ESG targets are met.

Multi-division corporations will often allocate various aspects of the overall

corporate ESG goals to contributing divisions or business units. At the
division or business unit level, specific projects need to be identified and
assessed for potential impact relative to applicable ESG targets. For example:
depending on the specific environmental target identified, changes in process,
equipment design, or upgrades need to be correlated with relevant reductions
in KWH hours of electrical use, volume of water used or discharged, waste
generated, chemicals used, carbon emissions, and the associated timeline for
these impacts to be registered. A strategic system demonstrating the path
toward these targets needs to be established in a manner consistent with

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organizational standards and the associated tools for its business units.
Often this path will not be a straight-line, but rather a stepped or staged journey
that will require numerous directional changes based on real-time monitoring
and analysis to assess interim results versus target progression.

A proactive, elastic, and calculated approach to meeting and exceeding

organizational ESG targets is required with system wide reach and top-down
engagement. Organizations need an interactive, metrics driven, real-time
Roadmap that’s supported by the right tools to meet the moment and lay
the foundation for whatever comes next. Those 2025 and 2030 dates are
just around the corner, but with the right steps, it’s not too late to reach your
destination on time.

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TOOLS OF THE TASK

Successful organizations will typically designate internal and
external members of cross-functional teams to identify the
specific plans for achieving objectives with the expectation
of routine reporting of progress and resource needs to senior
management. Having a designated and often external process
facilitator can be very beneficial in helping teams to accurately
amalgamate available data, assess baselines, identify appropriate
projects to achieve targets, model results, identify appropriate
metrics to measure progress (not just end targets), and create
the clear roadmap to demonstrate the organization’s path toward
successful ESG targets.

Additionally, having a centralized data tracking tool to collect, monitor,

and analyze process and target metrics is critical to allow for the timely
adjustments that ensure the ultimate end targets can be met. As organizations
increasingly have global reach with a need to manage the scaling
complexities of different languages, data systems, and regionally based
regulatory requirements—this centralized hub for real-time data capture,
tracking, and analysis is paramount to continued success.

At the National Association for Environmental, Health and Safety, and

Sustainability Management (NAEM) 2019 InnoTech Conference, “effective
management of EHS data,” “searching for software solutions,” and the
“successful integration of systems within companies,” were already a primary
focus of investment in the pre-pandemic landscape. The last few years of
mandated separation of work sites and exponentially increased online presence
of siloed data sources has dramatically expedited this need as a fundamental
component of successful process management. As CIODive noted in April
2022 article, “Excel spreadsheets won’t cut it” and companies need “systems
that gather data and analyze it to inform real-time decision making”4.

4
https://www.ciodive.com/news/sec-esg-cio-rules/621296/?:%202022-04-04%20CIO%20Dive%20
%5Bissue:40724%5D
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A Centralized Data System as Foundation for Unified ESG Purpose:

To keep pace with regulatory changes, bring disparate siloes and teams
together, involve stakeholders in top-down decision making, proactively
manage processes, and bring goals and pledges into material focus—data is
king. A comprehensive and properly integrated data system can allow for both
a bird’s eye view of systemic efficiencies and bottlenecks, while also being able
to focus on individual factors for a subset of operations.

Having and being able to easily present targeted metrics that are based
in materiality will anchor both long-term goals and immediate reporting
requirements in quantifiable terms of usage, waste, impact, and efficiency.
Data provides the tangible scaffolding to turn blanket ESG objectives into a
structured vantage backed by a strategic mindset.

This cross-functional picture of material usage and impact through data can
enable an organization to break down the siloes of distance and language that
may separate teams and disciplines—bringing them into a centralized effort
of deliberate implementation based on materiality. The data itself becomes
a unifying language toward common purpose and offers a sense of shared
ownership in the sustainability process.

And viewing the push to reach ESG benchmarks should be viewed as

a process and not just the effort to reach lofty end-targets. Success of
these long-term efforts are built on a consistent pattern of thoughtful/
impactful decisions throughout. It can take years of real-time tracking and
tweaking of material usage to build the necessary organizational efficiencies
required. Whether for decision making around purchasing for manufacturing,
considerations of upgrading a process and or abatement equipment,
or high-level stakeholder decisions on company direction—the ability to
proactively check the status and progress of material usage in real-time
allows organizations to establish baselines and set the interim targets that will
empower them to reach the broader goals for 2025 and beyond.

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As stakeholders, employees, vendors, and consumers alike want to see the

transparent evidence that ESG factors are addressed in the forward-thinking
actions of all organizations—it is the role of the centralized data hub to deliver
on all fronts. The importance of such targeted software places a heightened
focus on and empowered standing to ESG teams that brings them into direct
alignment with overall business concerns like never before. It also lays the
foundation for building a working/strategic map of how to reach organizational
goals and where to go after.

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BUILDING A ROADMAP FOR A SUSTAINABLE FUTURE

With a centralized, cross-organizational hub for ESG metrics in
place, a comprehensive, proactive, and living roadmap for reaching
ESG goals can be created. Sustainability in corporate governance is
not something that can or should adhere to an arbitrary ‘end point.’
Done right, a working ESG roadmap should be an organic, evolving
process-document that builds elasticity within organizational
systems for scalable optimization.

A clear outline should be built on achievable interim goals that are aligned with
an approved cost/benefit analysis—working with specific target metrics and
internal process metrics that follow a strategic plan. These centralized, data-
driven objectives need to incorporate cross-functional team monitoring in real-
time, prioritizing actions that have shown quantifiable impacts and continual
modifications to drive efficiency.

THE WHO: It’s important to clearly delineate who within an organization has
“ownership” of the process, or what external expertise and resources need to be
incorporated into the process to achieve success. As the scope of ESG efforts
are likely to touch a wide range of departments and in some instances force/
suggest changes to operations and available resources, a well-established
and publicly defined path toward enacting these changes in real-time may
be required. Empowering individuals and teams of either internal personnel,
external professionals, or more likely a combination of the two, to enact the
necessary change is vital.

THE WHAT: No two organizational structures will have the same parameters,
requirements, and scope. Selecting the right metrics and following the data to
focus on what is material to a specific system—measuring/tracking/adjusting
usage of water/energy/resources—is key for implementing meaningful
change. Identifying which metrics to focus on is only possible with well-

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established baselines and a period of trial and error to pinpoint key efficiencies.
This process will also highlight areas of weakness that may require system
improvements to monitoring, equipment, and facility capabilities.

THE WHERE: Sustainability efforts will not always be equally distributed, based
more on the facilities, sites, and disciplines that have the greatest impact on
reaching interim benchmarks. Utilizing comparative metrics between different
facilities and focusing on normalization factors will be a more direct path to
efficiency than an attempt at equal distribution. To save time and money, a
working roadmap needs to be more strategically minded up front and scaled to
specific targets of change as it goes. That being said, a big part of developing
a working roadmap requires a holistic, bird’s eye view of cross-organizational
functionality to determine the specific process needs and best course of action.

THE WHY: Facing the growing call for a standardized regulatory threshold amid
EU and SEC regulatory escalation is only the beginning. Being able to document
and support sustainability efforts around material usage is increasingly likely
to become very serious in terms of mitigating reputational risk factors from
both a PR standpoint and in terms of overall business valuation. Sources of
investment capital are paying closer attention to “green market” potential,
with record investments in green bonds and sustainable investing showing
significant year-over-year growth since first being introduced to European
markets in 2007. Companies that can offer quantifiable proof of long-term
sustainability efforts and the elastic systems that are required to get there carry
a badge of progressive action and resilience that is starting to equate to big
business.

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THE HOW: Often, the implementation of such a plan is constrained by the

demands of time and resources amid all of the other requirements of day-
to-day operations. Outside guidance and expertise can be a vital launchpad
or ongoing management factor for organizing and structuring a strategic
approach to the sustainability question. From helping an organization to set
up, maximize and maintain a centralized metrics database, to project planning
and implementation, with the interpretation and incorporation of regulatory and
industry standards throughout—an external, dedicated, professional vantage
can be instrumental toward devising and maintaining a proper roadmap to
reach ambitious benchmarks. Whether helping to identify and mitigate risk
factors and maximize sustainable ESG opportunities, updating the permitting
processes while working directly with regulatory bodies to manage agreements,
or working with internal teams to build a proactive data center from the
ground up—outside expertise to facilitate the process can help organizations
of all sizes. Such external help can ensure that EHS teams can think bigger,
aggregate new data, prioritize tasks, make real-time adjustments to maximize
efficiencies, and clearly communicate their benchmark achievements every
step of the way.

As to THE WHEN of it, regardless of what stage an organization is at or what

benchmark goals they are trying to reach, these past few years of Black Swan
disruption amid an escalating climate crisis have shown—the time to act is now.

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CONCLUSION
Whatever timeline or goals have been set by an organization—it
isn’t too late or too early to take proactive steps toward achieving
a sustainable future. A robust and elastic centralized data
collecting and monitoring system in conjunction with a strategically
minded and material-based roadmap toward ESG benchmarks
should now be key elements of every healthy and success-
oriented performance model. Granular attention to usage metrics
coupled with a big-picture view of operational performance will be
increasingly necessary for regulatory reporting, public perception,
and overall business valuation moving forward. ESG concerns and
sustainability goals have become building blocks for big business
and proof of long-term potential for organizations of all sizes.

The software tools utilized to build this foundation for data management
need to be able to integrate with varying systems and processes around the
world and customizable enough to focus on the specific needs of each unique
company. Rigidity in design, implementation, and use will only go so far and
last so long before new circumstances require a different approach. Flexibility
is key—and a holistic vantage on how systems and services can evolve
with the needs of the moment will be the bellwether for lasting, sustainable
organizations. Lofty goals are only unattainable if the realistic interim steps to
get there haven’t been charted and climbed toward with care along the way.

The combination of CAPACCIO’s EHS-Dashboard™ software platform, along

with the comprehensive consultation services and strategic support they
provide, has been proven to meet and exceed the changing needs of a wide
range of organizations working toward a sustainable corporate future.

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When it comes to achieving ESG benchmarks, internal EHS departments

cannot just “make it happen.” Whether utilizing legacy systems or integrating
a targeted technology platform, CAPACCIO’s consultation professionals
specialize in the design and implementation of strategic programs that align
ESG efforts with overall business goals toward successful outcomes.

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EHS SYSTEM SOFTWARE & STRATEGIC PROGRAM SOLUTIONS FROM

CAPACCIO
After 30 years in the trenches of the EHS industry, Capaccio
Environmental Engineering, Inc., has developed the strategic method
and software tool to specifically address the challenges of creating
a proactive, integrated EHS program head on. From assessment
to implementation, the combination of the EHS-Dashboard™ SaaS
software platform with CAPACCIO’s comprehensive consultation
services, including the award winning EHS+ Optimize strategy,
can provide a single source, scalable solution to the overarching
challenges that EHS teams and programs of all sizes face in 2022
and beyond.

CAPACCIO’s EHS-DASHBOARD™ is the tailor-made tool developed by industry

engineers and scientists after decades of trial and error. One of CAPACCIO’s
certified field experts described it as “the tool I wish I’d had when I started in
this industry twenty years ago.”

Highly customizable to fit your organization’s specific needs, this cloud-based

software platform offers real-time data sourcing, integration, and analysis to
enable EHS teams to stop focusing on where they’ve been and instead work
proactively toward where they want to go.

A major advantage of CAPACCIO’s solution over other software systems, is

that the EHS-Dashboard™ has the ability to integrate with, rather than replace,
other established systems that work for a specific purpose—and it is supported
by a team of true EHS professionals that understand how to modify and
align systems to meet these growing needs. This allows for the creation of a
centralized data hub without having to change out existing systems that would
drive up costs and create unnecessary disruption.

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• Intuitive interface around a centralized database that can pull data from
disparate systems
• Proactive planning for benchmarks and reports with linked permits and
action items
• Real-time data sourcing and tracking of applicable data streams for
specific usage
• Automation of routine processes to save time and effort on busy work
• Reduced human error with automated calculations and heightened data
integrity
• Year-over-year tracking of trends for internal reporting and a high-level
view

From facility optimization, development and integration of EHS programs,

regulation and compliance assessments, to the design and implementation
of a successful ESG roadmap—CAPACCIO’s Consultation Services, including
the EHS+ OPTIMIZE program (Winner of the 2019 Environmental Business
Journal’s – Business Achievement New Practice Award), offers EHS
professionals to add depth, expertise, and vision that empowers and extends
existing EHS/ESG teams and initiatives.

Designed to help organizations assess and prioritize the efficiency of their

EHS/ESG programs for meaningful change and integrated growth, the data-
driven EHS+ Optimize program has been proven to:

• Increase Employee Engagement

• Create Trusted Transparency
• Demonstrate Value Creation
• Strengthen Operational Efficiencies
• Foster Industry Leadership
• Contribute to Employee Well-being
• Improve Community Safety

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By taking a systems-based approach and applying algorithmic modeling to

predict the impact of proposed routes toward facilitating priority actions, this
quantitative method helps to focus attention and resources on the best path
that works to maximize overall value. Though no one can predict further Black
Swan type disruptions ahead, a deeper focus on risk management that stresses
the importance of speed, elasticity, and company cohesion around strategic
redesign can help to ensure an organization is not unprepared when the next
surprise comes.

Using this EHS+ Optimize strategy, some of CAPACCIO’s management

clients have risen to the Forbes 500, the Newsweek Green 500, and the World
Economic Forum (WEC) Top 100 World’s Most Sustainable Corporations.

For reaching ESG goals, CAPACCIO’s Consultation Services can help companies
to interpret their collateral information and determine if clients are making
progress on the process level and establish a roadmap for success. By
aligning the corporate mission, vision and strategy with internal business
tools, CAPACCIO’s on-site EHS professionals can ensure that all aspects of
operational processes speak the language of sustainability.

To achieve the potential of what EHS programs can and should be in a more
sustainable corporate culture, EHS professionals need to be able to embrace
the creativity and innovation that can spark bold steps that lift organizations
and entire industries alike. It all boils down to available time and focus.
With the EHS-Dashboard™ and the comprehensive consultation services
from CAPACCIO, these two invaluable resources can be reallocated back
toward reaching benchmarks and driving audacious innovation for long-term
sustainability.

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 Lisa Wilk Hunter Richards

Business & Sustainability | On-Site Services | Compliance | Engineering & Design

Powered by our industry leading EHS-DashboardTM

100% staffed by technical experts

Capaccio.com

About Capaccio Environmental Engineering, Inc.

Since our founding in 1992, we have helped companies of all sizes to continuously grow, be competitive
and move the needle towards a sustainable future. Our years of deep experience and unflagging belief in
our mission to “help industry and the environment prosper,” drive every engagement we enter. Our award
winning track record and core values of integrity, dedication, commitment and responsiveness make us a
great firm to work with.

capaccio.com | [email protected] | (508)-970-0033