From Optional to Essential—ESG Is Now Table Stakes for Many Companies

Interest in environmental sustainability is rapidly increasing worldwide, spanning various sectors—from businesses and corporations to individual citizens. In Canada, climate change remains a pressing concern, with extensive news coverage of devastating wildfires, floods, and hurricanes across the country. 

As a resident of Canada’s East Coast, I experienced the impact of the 2023 Tantallon wildfires firsthand—the uncertainty among communities and beyond is palpable.

Not be outdone, 2024 is shaping up to be an above-average season with Tropical Storm Risk (TSR) and forest fires; last year alone, a staggering 16.5 million hectares of land burned in Canada. With the rise of climate change, we can no longer table environmental action. That goes for global enterprise’s part in it all as well. 

Businesses and corporations are starting to take note of the importance of environmental sustainability. 

Let’s explore increasingly vital areas where companies can invest significantly in ESG (Environmental, Social and Governance) initiatives for overall better outcomes. 

Carbon Emissions Reporting

While there are significant benefits for companies that prioritize a robust ESG commitment as part of their business strategy, it’s no longer an optional consideration—it has become a critical element for long-term success. 

Many Canadian companies must soon file ESG disclosures under multiple ESG standards. These include the Corporate Sustainability Reporting Directive (CSRD) in Europe, which requires businesses to publish their first report in their 2025 fiscal year. The Canadian Sustainability Standards Board (CSSB) is reviewing the International Sustainability Standards Board (ISSB) global baseline for use in Canada, while the Canadian Securities Administrators (CSA) is considering whether—and over what time frame—these standards should be mandated. 

According to a recent PwC Canada study of the public disclosures of more than 250 of Canada’s largest businesses, 78% of companies disclose information about emissions from their own operations (scope one and scope two emissions). However, only 47% also disclose the emissions from their supply chain (scope three emissions)—an ISSB requirement. This underscores the growing importance of transparent ESG reporting in the corporate landscape.

Reducing emissions from vendors and suppliers is a critical corporate challenge. Scope 3 emissions specifically—indirect emissions from suppliers—can constitute over 80% of total carbon contributions for many companies. Addressing these emissions is vital for achieving climate goals and regulatory compliance.

Considering this, an easily achievable opportunity for C-suite executives is to incorporate technology for reporting carbon emissions as part of their broader ESG strategy.

Adopting new technologies to help support this charge is essential for small-medium enterprises, not only for compliance but to answer critical questions from stakeholders about how they manage ESG risk and opportunity.

For example, in a pivotal move underscoring its commitment to sustainability, Ricoh has unveiled a groundbreaking partnership with Watershed (a company dedicated to capturing sustainability data, reporting, and decarbonization). This collaboration empowers business and enterprise leaders with advanced tools for climate data reporting and robust sustainability strategies to drive progress toward their ESG objectives. 

To provide insight, the Sustainability Services Dashboard enables customers to measure, report, and take action on emissions data (related to Ricoh Digital Services). 

This innovative technology integrates precise emissions measurement, providing data-driven insights across all emission scopes. The dashboard offers customers a comprehensive view of their Scope 3 emissions footprint, using both privately and publicly disclosed financial and climate information.

This transformation exemplifies how businesses can leverage crucial tools to navigate the complexities of sustainability and climate data management while also driving leadership in ESG. 

Vendor Accountability

ESG accountability goes beyond internal organizational staff. The ESG web spans suppliers, vendors, contractors, and more. One vendor example that touches almost every industry is printing and paper. 

Customers are demanding more insight into the environmental impact of their print environment and their print suppliers. Seventy percent of organizations say it is important their print supplier provides a range of sustainable products and services, and 69% say it is important print suppliers show they are reducing their own environmental impact. 

This is an opportunity for suppliers to deliver value-led, sustainability-focused assessments, products and services to support their customers’ environmental goals. 

At Ricoh North America, the Sustainability Management Center witnessed an impressive 103% surge in requests for environmental support from both our customers and internal staff compared to the previous year. 

Simultaneously, we observed a substantial increase in customer engagement opportunities related to sustainability. Rather than merely serving as suppliers who ‘check the box,’ we’ve noticed that our customers increasingly seek true ‘partners’ in sustainability. 

Sustainable Practices Often Yield Long-Term Cost Savings and Attract Top Talent

Contrary to the misconception that sustainability practices are costly, they can actually enhance profitability. Companies with strong ESG ratings consistently outperform the market over the medium and long term. Energy efficiency, waste reduction, and streamlined processes contribute to financial benefits. 

With that said, profit isn’t the sole driving factor to implement an ESG strategy.

More sustainable companies attract top talent. Employees increasingly seek purpose-driven organizations that align with their values. Think of who you hire, what they advocate for, and whether they will actively come along on the journey to champion ESG. 

The current demographic of the workforce drives increased awareness of environmental sustainability.

Currently, millennials represent 35% of the total US labour force (the largest working generation), and they want to work for organizations that foster innovative thinking, develop their skills, and make a positive contribution to society. 

In conclusion, the journey towards integrating ESG principles into corporate strategy has shifted from being an optional endeavour to a pivotal factor in long-term success. 

ESG as a Pivotal Factor for Success

As climate-related challenges intensify worldwide, from devastating wildfires to unprecedented storms, the imperative for businesses to act responsibly and proactively has never been clearer. Companies embracing robust ESG practices are not only meeting regulatory requirements but are also enhancing their resilience, attracting top talent, and bolstering their brand reputations. 

To glean evidence of what a sustainability legacy could look like for companies, Ricoh’s unwavering commitment to environmental sustainability dates back 48 years. Its excellence in sustainability has garnered recognition from several third-party organizations, including ENERGY STAR, TIME World’s Most Sustainable Companies, EcoVadis Gold, and the CDP Double A-List.

Ricoh’s longstanding commitment and recognition of sustainability underscores the benefits of early adoption and leadership in this critical arena. 

As we move forward, the integration of sustainability into business strategies isn’t just prudent; it’s essential for navigating a rapidly evolving global landscape.

In essence, as ESG standards become more stringent and disclosure requirements more widespread, companies that prioritize sustainability will not only thrive financially but will also play a pivotal role in shaping a more sustainable future for all.