ESG operating model

An ESG operating model is a strategic approach to integrating Environmental, Social and Governance (ESG) factors into an organisation's business strategy and operation. An ESG operating model focuses on improving an organisation's ESG performance and strengthening its long-term sustainability and competitiveness.

Typically, an ESG operating model involves a number of different processes, including identification of ESG risks and possibilities, the establishment of ESG goals and measurements, the development of an ESG strategy and integration of ESG principles into business planning and operation.

An effective ESG operating model is an integral part of an organisation's overall strategy and governance structure, ensuring that the ESG principles and practice are integrated into the operation and business practice of the entire organisation. It may also help the organisation meet regulatory requirements, improve its reputation, and create long-term value for its stakeholders.

We use an approach taking its point of departure in the existing, financial operating model and processes and, subsequently, extends it as regards ESG reporting. We involve practical experience gained from ESG reporting in the industry so as to ensure operational and tested solutions.

The approach is based on five core area which, together, form the framework for a functional model with underlying ESG reporting processes and the operation hereof.

People 

• Ownership (who does what)
• Training and education
• Capacity, timing, and bottlenecks
• Backup and adoption
• Support and knowledge. 
   

Technology 

• Applications (ERP, CRM, BI, CPM, consolidation, etc.)
• Data model and master data (client/product/legal master data, etc.)
• System integration (API, connectivity, RPA, etc.)
• Governance (security, controls, roles, ’segregation of duties’, etc.)
• ‘IT maturity’ (scalability, IT skills, IT support, etc.). 
   

Policies and procedures 

• ESG accounting manual
• Work instructions
• Guidelines
• Training material
• Ownership model (governance)
• Controls
• Quality
• Risks. 
   

Management and culture 

• Leadership and responsibility
• Culture and understanding
• Bonus programs and goal. 
   

Organisation and geography

• Centralised vs decentralised ownership and setup
• Reference
• Responsibility and mandate.
   

The approach is used methodically, meaning that initially we will make a 'gap assessment' relative to the desired ESG operating model and reporting as an overview of the changes to the existing setup that it is necessary to make. Subsequently, we divide the desired changes into specific work processes. In collaboration with the customer, we will agree to which extent there is a need for Basico to solve underlying activities in full or part.