How ESG can drive real value: An LDC & BFY Group webinar

As part of its ongoing portfolio webinar series, LDC recently partnered with BFY Group – a management consultancy specialising in sustainability, operational, and people-related transformation projects – to help our business leaders explore how ESG can drive real value and how to consider it as an opportunity rather than a cost.

Over 60 leaders from a wide range of sectors including technology, business services and media, attended the session.

With many companies experiencing increased cost pressures and a more volatile geopolitical landscape, the purpose of the discussion was to help business leaders develop a set of tools to increase efficiency and deliver bottom-line benefits while improving ESG performance.

The key takeaways for management teams include:

• Leverage the mutual benefits: Operational efficiency and ESG are two sides of the same coin and can positively impact each other. Any project that seeks to increase operational efficiency – whether it be to reduce cost, create capacity, or grow the business – will likely positively impact ESG performance.
• Go beyond environmental: whilst operational efficiency is often associated with environmental performance, the use case spans across ESG – with material benefits also possible in the realm of social and governance topics.
• Identify the right metrics to measure success: consider both the financial and non-financial metrics associated with any project or change programme; operational changes, such as improving leadership capability and changing operational processes can positively impact metrics like employee and customer satisfaction and energy consumption. Consider whether the impact is positive or negative and if it’s significant.
• Creating a high-performance culture is key: delivering leadership training that upskills leaders in effective communication, coaching, and performance management and genuinely listening to, and asking for, feedback from employees can help to foster a culture of high performance. This can create capacity, reduce variability in task performance, reduce cost to serve and operating costs, whilst also improving engagement, reducing turnover and driving down operational emissions.
• Use a simple, 4 step process to identify opportunities: a standard diagnostic approach includes a) developing a fact-based ‘as is’ view of the business, b) agreeing a baseline position, c) understanding the root cause of specific problems, and d) identify improvement areas and link them to operational and ESG metrics
• Overlay an ESG lens on all projects: make sure to consider the ESG impacts of a project, whether these impacts are positive or negative (and whom they impact), and whether the impacts are material to the business. This will then help to maximise both operational efficiency and ESG-related impact

At LDC, we are committed to supporting our portfolio companies to grow sustainably, helping them to make environmental, social and governance improvements during our partnership, no matter their starting point. We firmly believe that ESG can create value in both the short and long term and proactively seek ways to drive operational efficiency and ESG performance improvements across our diverse portfolio.