The challenge of ESG
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The challenge of ESG

Being a member of the Green Stock Exchange does not guarantee ESG funds will welcome a company with open arms.

You would think that a business that has purpose and sustainability at its core would be feted by ESG fund managers, but that’s certainly not the case for Aim-listed Accsys, which owns sustainable wood brands Accoya and Tricoya.

As director of marketing and communications George Neel explains in the latest Conscious Communicator podcast, ESG is a process with complex rules and frameworks that requires a lot of groundwork to be put in by a company before it gains any recognition. It is time-consuming and expensive.

Admittedly Accsys is not a household name, but the Anglo-Dutch timber technology company has solved the major issue that affects the use of timber in the built environment: rotting.

It modifies fast growing, sustainable wood, giving it a guaranteed life cycle of at least 50 years and making it a viable alternative to less sustainable products, such as concrete. What’s the difference between a tonne of wood and a tonne of concrete? About one and a half tonnes of carbon dioxide. With the building sector accountable for 40 per cent of greenhouse gas emissions worldwide, this presents a huge opportunity for Accsys. Unlike other raw materials, there is also an unlimited supply of timber.

As Neel explains, batting away concerns about trees being felled, the best thing you can do to a tree once it has finished growing (at about 25 years) from a sustainability point of view is to cut it down because, by then, it has finished absorbing carbon dioxide. When the timber reaches the end of its ‘working life’, it can be recycled as wood chippings, for example. It is part of the circular economy.

But even with a product that has a profound, positive impact on the planet, and a stated purpose Changing wood to change the world, embracing ESG is hard work – and it’s work that’s never really done. There’s always another target or score to focus on.

The key, according to Neel, is to employ the services of ‘a true sustainability consultant’ and to create a road map to build out a company’s ESG credentials, picking issues pertinent to the business to focus on, and to communicate these to colleagues, taking them on the journey.

‘It’s your colleagues’ desire to want to deliver on ESG that ultimately makes a difference,’ he explains. ‘Because, like values, like strategy, like purpose, they have to live daily in the business at all levels of the organisation.’

Ultimately, telling the story authentically, with internal advocates echoing that vision, will attract ESG investors because, as Neel points out, many are developing their own systems for analysing a company’s ESG credentials. As due diligence improves, this can only benefit sustainable businesses that live up to their pledges.

Listen to the latest Conscious Communicator podcast