Notes on ESG for the Managers: Top Six Skills for Future
As the industry, consumer, as well as government bodies embrace Environmental, social, and governance (ESG), future management professionals need to catch up to the ESG-related demands of their sector. While ESG-related skills might be a beginner’s affair for the newcomer to the industry, the leaders need a steep learning curve to lead and implement the impending norms. On a similar note, as the demand for ESG conscious labour increases in the market, to prepare the next crop of ESG thinkers, B-schools will need to integrate ESG topics into the traditional courses of business studies: Finance, Operations, Human Resources, and Marketing. The intersectional topic that ESG is, demands not only require astute analytical abilities but also a significant bandwidth of social awareness and sensitivity. Beyond the conscientious step that it is, what should drive future leaders to master ESG-oriented skills is the need to mitigate long term risks as well as the premium that ESG-compliant goods and services command.
1.Environmental Sustainability: With tax holidays announced around sustainable initiatives, impact investing as a financial tool growing and mandatory ESG reporting put into place by government bodies, the managers have to find ecofriendly alternatives for the operations of their company. Not only do ecofriendly options will hold the organisation in good stead in the face of the upcoming challenges of climate change, but also boost selfreliance. Moreover, renewable and other sustainable operations are less expensive. Be it via robust B-school training or on their own, a manager will soon need to find environment-centric solutions for their organisations as well as report compliances in the area. Some sought after sustainable skills are carbon footprint reduction, resource efficiency, and waste management.
As ESG operations will gain traction, organisations will be required to measure the impact of their environmental and social efforts
2.Social Responsibility: Brands stepping up to voice the concerns of social issues such as the MeToo Movement, Black Lives Matter or LGBTQ matters, especially in terms of their Marketing strategy shows that social responsibility has become an integral part of the business consciousness in the market. More over, from the employee perspective, there has been a greater need to see representation in terms of caste, gender, race, and sexuality. Therefore, to lead in a company environment, where bother organisational policies as well as the collective belief system place emphasis on social awareness, for leadership aspirants it seems to be imperative to have an in-depth knowledge of the social issues, including the history and the latest developments in the matters.
3.Governance:Government compliances have always been a constant preoccupation for the management of an organisation, which is even more complex a task in this age of transnationalism. Transparency, accountability and solid policy oriented knowledge would be demanded of the aspiring decision makers. Additionally, they need to master skills such as risk management and regulatory compliance.
4.Impact Assessment: As ESG operations will gain traction, organisations will be required to measure the impact of their environmental and social efforts. Here, future managers, especially those who are Operations experts, will play an important role. Analytics tools, Artificial Intelligence, and Machine Learning technologies could be leveraged to understand and identify the loopholes and fortes of the company, conduct stakeholder engagement, prepare ESG reports as well as run comparative studies with other companies, with the aim to run smooth ESG compliant entities that also garner optimum profits. In order to implement such technically heavy tasks, the management leaders and aspirants need a strong analytical bent of mind, if not an already sound technical capability.
5.Innovation: B-schools have long harped on skills such as problem-solving, design thinking, and experimentation. As the advent of ESG deepens, leaders will encounter challenges for which they will not have any precedence to fall back on. Under such circumstances innovation will be key.
6.Stakeholder Engagement: The age-old skill to listen and understand the market so that the best performance could be delivered, will remain essential in the ESG-demanding market of the day and future: there can never be enough stress upon stakeholder engagement. ESG, as it becomes the mainstay in the business world, would require managers to step up their game by being updated on the latest developments in the area. In the next few decades, beyond all the skills a manager could develop is grit, the absolute essential for learning.