Environmental, Social and Governance (ESG) strategy continues to be a major corporate focus as it is no longer simply a policy but, instead, an essential enduring institutional behavior. Between pending regulations, evolving standards and increasing stakeholder expectations, there’s a lot to keep top of mind. ESG commitments help create a positive impact in the organizations that make them by promoting social responsibility, sustainability and business resilience — all of which can ultimately lead to enhanced performance.
In order to successfully implement ESG initiatives, financial institutions should take a strategic approach. This includes developing a clear mission and vision for the program that aligns with the bank’s overall objectives, values and commitment; investing in talent and professionals who can help the organization achieve its goals; engaging stakeholders across all levels of the organization; and communicating both internally and externally about progress made and its continuing commitment.
As such, banking leaders should start by establishing an objective that outlines the purpose of their ESG commitment. This should provide an understanding of what is expected from this initiative — along with specific goals and metrics that will be used to measure goal attainment. Additionally, it should include any relevant timelines for implementation or targets for reaching milestones so that everyone involved understands what needs to be accomplished over time.
Once a plan is in place, invest in your talent to assist in the achievement of your objectives. This could include creating dedicated positions within the organization that are responsible for overseeing ESG initiatives as part of their professional responsibilities as well as developing robust hiring and training programs to identify individuals with the appropriate skillsets and backgrounds needed. Banks may also want to consider looking into green initiatives such as environmental certifications or accreditations, renewable energy sources, investing in sustainable technology solutions or supply chain management practices that ensure suppliers adhere to those same standards.
Engaging stakeholders across all levels of the organization is essential when it comes to launching an ESG program within a community banking enterprise. Creating internal awareness will help ensure everyone is informed of and on board with its commitment — from departments such as finance, operations, marketing and human resources — among many others — so they determine how best to integrate these efforts into existing business models while also identifying areas where additional investments may be required (such as sustainability consulting services).
At Manasquan Bank, we created an internal ESG committee that developed a framework of a collective vision beyond financial achievement, across three major areas including:
- Fostering a productive, inclusive and inspiring work environment where all employees feel they are valued, and empowered to make a meaningful positive impact and are appropriately recognized and rewarded.
- Upholding ethical business practices and ensuring the Manasquan Bank experience remains safe and secure for every client and assist those clients in mitigating their carbon footprint by providing innovative digital banking solutions.
- Providing support to a wide variety of community nonprofit organizations with involvement efforts that go beyond banking. Whether the bank is providing assistance for not-for-profit fundraisers, cleaning up beaches or offering time serving on nonprofit boards, we are committed to assist in building and responsibly growing thriving communities.
Our environmental commitments include providing sustainable banking solutions, for example, paperless options for our clients including eStatements and virtual transaction tickets.
We also continue to invest in our colleagues with a Total Rewards program, supporting our talent and developing future leaders and promoting Diversity, Equity and Inclusion (DE&I) throughout the organization.
Moreover, external engagement is beneficial in helping generate buy-in from clients, partners, and regulators regarding these commitments; this could include press releases announcing new commitments or milestones achieved; hosting meetings or town halls; creating digital content (including blogs or podcasts); leveraging social media; issuing reports about progress made; etc., depending on the audience being targeted.
By taking these steps toward developing an effective strategy for incorporating ESG principles into your operations, community banking enterprises can position themselves for long-term success while also ensuring they stay competitive in an increasingly complex landscape where sustainability is becoming more important than ever before. Not only does this create opportunities for cost savings and revenue generation but employee engagement often increases too, due to a shared commitment toward common goals related to corporate social responsibility practices. With increased consumer demand driving companies toward taking greater accountability for environmental impacts associated with their business models too — it is imperative now more than ever before, that organizations start taking serious action toward prioritizing sustainable strategies throughout every aspect of their operations if they wish to remain competitive going forward into today’s modern economy.
James S. Vaccaro is a former chair of NJBankers and chair, president, and chief executive officer of Manasquan Bank, a $2.7 billion mutual banking organization founded in 1874. Manasquan Bank currently operates from 15 offices and branches located in Middlesex, Monmouth and Ocean Counties, New Jersey.
