Key Takeaways: Behind the Scenes of Scaling ESG at a Global Corporation

Alexandra Nemeth

Senior Manager, Content Marketing & Storytelling at MovingWorlds

The TRANSFORM Support Hub is an easy way for professionals of any background to build their social innovation skills for the future of work. Our monthly thematic learning groups bring the platform’s different learning, networking, and community elements together in a time-bound way: giving professionals the opportunity to deep-dive into a specific sustainability topic with a group of peers, work through associated courses and guides together, then get feedback on the progress they have made with an exclusive workshop from an expert in the field.

Our April learning group was on the theme of “Environmental, Social, & Governance (ESG),” and below, we’ll share an overview of its key takeaways along with insights shared during the closing workshop with ESG Industry Leader, Caroline Meledo. 

Learning the Foundations of ESG

Over the course of the month, our group worked together to learn the fundamentals of ESG. After a group kickoff webinar to introduce the topic, each member individually completed our certificate-bearing ESG Fundamentals learning course, which covered:

  • The history of ESG
  • Popular ESG frameworks
  • An overview of ESG reporting regulations & requirements
  • Examples of how to combine ESG frameworks for real impact
  • The case against ESG
  • ESG success stories
  • 10 steps to implement ESG at your own company

Our learning journey together culminated in the closing Industry Leader webinar with Caroline Meledo, where participants had an opportunity to get a behind the scenes look at what it takes to bring an ESG strategy to life within a global corporation.

Key Takeaways from an ESG Industry Leader

From leading corporate citizenship initiatives at the local level to helping shape global policy for business and human rights at the UN, Caroline has spent her career creating value for communities, companies, and society at large. Most recently, Caroline joined Bayer as the Director of ESG for Bayer Consumer Health.

Bringing Bayer’s Sustainability Strategy to Life

Most people reading this are likely familiar with Bayer – it’s a multinational company that focuses on agriculture, pharmaceuticals, and consumer health. At the global level, Bayer is committed to impacting some of the biggest social and environmental SDGs to achieve its vision of “health for all, hunger for none.” On the environmental side, every single division is working towards the shared goal of carbon neutrality. On the social side, each division has its own focus related to its portfolio and expertise — the consumer health division, which Caroline leads, is focused on enabling access to everyday health products. 

Two key pillars of Bayer Consumer Health Sustainability Strategy

As Caroline explained, consumer health is basically self-care: everyday health solutions you can access over the counter (think: Aspirin or Alka Seltzer.) Two “north stars” guide the consumer health sustainability strategy, both of which are embedded in Bayer’s Board of Management compensation strategy and audited/reported on annually:

  1. Access: Reach 100 Million underserved people by 2030. This involves adapting Bayer’s portfolio to meet the unmet needs of consumers without access to basic healthcare services, making it available and accessible at an affordable price, and removing barriers to accessible, nutritious food and supplements.
  2. Environment: Be climate neutral in its own operations by 2030, and net zero by 2050. This involves increasing energy efficiency, driving collective action throughout the supply chain, and innovating sustainably sourced, recyclable packaging. 

So, how does a company as large as Bayer fully operationalize its sustainability strategy? The key is truly embedding sustainability across every part of its business. As Caroline explained, the task of achieving sustainability is not owned by a stand-alone sustainability team – instead, it’s shared across all business functions. Branding plays a role in inspiring and educating customers. Design plays a role in advancing access and reducing the carbon footprint of new iterations of packaging. Supply plays a role in mindful resource use to reduce energy, water, and waste in the production process. Going to market with new products plays a role in adapting the portfolio to consumer’s unmet needs, at an affordable price, in accessible channels. 

Lessons Learned: Sustainability in Practice

Over the course of her career, and in her role at Bayer, Caroline has gained valuable insights into what works (and what doesn’t work) when it comes to sustainability in practice. To be truly successful at driving transformation at scale, it’s important to have:

Executive Ownership

As Caroline explained, bottom-up approaches don’t work on their own. The only way to create impact at scale is with the support of executive leadership. It’s not enough to have a “hero CEO,” what’s needed is involvement and support from the entire executive committee. 

Sustainability Embedded Throughout the Business Model

A sustainability team driven approach doesn’t work. As we shared in this article about the role of CSR leaders in 2023, “Executives need to go beyond acknowledging sustainability as a strategic priority, to actually treating it like one. That means setting measurable KPIs for the ways each business function contributes to the broader sustainability strategy, and evaluating compensation and performance accordingly. Sustainability isn’t “someone else’s job” – and placing the mantle of responsibility for achieving a company-wide sustainability strategy on a single CSR or sustainability leader is basically designing to fail.”

A Direct Tie-In to Senior Leaders’ Responsibilities

If you only have a network of champions scattered throughout the company on a voluntary basis, the results you will be able to generate are limited. Instead, it needs to be part of senior leaders’ jobs to deliver on ESG goals and be held accountable for progress towards company targets.

Top-Down Targets from the Board of Management

When companies only evaluate sustainability from a cost vs. revenue perspective, it’s hard to justify investments in advancing sustainability goals. Instead, focus on the value a sustainable approach will yield, and set targets at the board of management level that apply to all levels of the company. By tying compensation, incentives, and rewards to these targets, it builds accountability to ensure that sustainability indicators are managed as thoroughly as financial ones.

What’s Next: Sustainability Trends to Watch

Since Caroline first began her impact journey, the corporate social responsibility and sustainability space has evolved significantly – and she’s had a front-row seat. In closing the session, she highlighted 3 trends she’s seeing:

Increased Emphasis on Reporting

Until recently, the people doing the sustainability work have also been the people reporting on it. But that’s changed, and the increased reporting burden means small teams often have to balance the trade-off between action and reporting. The number of potential data points to report on are practically infinite – when considering a new one, Caroline suggests asking yourself, “to do what?” If you can’t answer that question, the time acquiring that data isn’t worth the payoff as far as moving the needle forward on your sustainability strategy.

Increased Backlash to Greenwashing

Caroline agrees that the crackdown on greenwashing is overall a good thing, but taken too far it can lead to “green-hushing.” Companies are increasingly choosing to remain silent on their sustainability targets and strategies until every single element is in place (and triple checked), because they don’t want to be accused of greenwashing. But that eliminates the opportunity to motivate action by being aspirational, or even to build partnerships with other organizations working towards similar goals.

Sustainability as a Business Model

For a long time, sustainability was treated as a “nice-to-have” unrelated to a company’s core business. But that’s changing – sustainability isn’t ancillary to the business model, it increasingly is the business model. 

We’re so grateful to the professionals who participated in this inaugural thematic learning group, and to Caroline for generously sharing her time and insights with us. We look forward to launching the next thematic learning group in June on the topic of “Design Thinking & Human-Centered Design” – if your work could benefit from new problem-solving approaches, perspectives, and networking, we invite you to join us on the TRANSFORM Support Hub!