Organizations of all kinds are under growing pressure from stakeholders to incorporate environmental, social, and governance (ESG) opportunities and risks into their business strategies.

This pressure is coming from all sides. Investors want greater transparency on ESG programs and performance, while board members and C-suite executives are being held accountable for their companies’ ESG initiatives. Employees, customers, and business partners want to know how the companies they work for or do business with are positively impacting the planet and society as a whole, and are making choices accordingly. Consumers, for example, are increasingly choosing more sustainable, ethically produced items even at higher price points, and employees are willing to take pay cuts to work for employers that align with their values.

All this means that as companies implement initiatives designed to meet these demands to improve the world around them, they are also creating value for their stakeholders. In fact, ESG factors are now often counted among the top key indicators of an organization’s long-term resilience, which can be a driving force behind ESG strategy development and implementation. Corporations are setting goals, establishing metrics, disclosing data, and identifying ESG-related risks and opportunities – all in the name of positioning themselves for current and future success.

However, with ESG still a fairly new concept for many, not all companies are at the same stage of maturity in bringing it into their business plans. In our experience so far, companies generally fall into one of three main stages: Novice, Supporter, or Gamechanger. Drawing from our deep expertise, we’ve designed an ESG Maturity Model that not only allows organizations to pinpoint their current position, but also charts a clear path for advancement. As we’ll explore, an early assessment can provide a clear understanding of where improvement is needed, which is critical to building a plan for mitigating ESG-related risks, driving stakeholder engagement and trust, and capitalizing on opportunities. By leveraging this tool, organizations can tap into proven strategies to elevate their ESG performance, unlocking tangible benefits and driving transformative impact.

Novice is the first category along the ESG maturity spectrum, composed of organizations that are just beginning their ESG journey. At this initial stage, organizations may be implementing ESG initiatives in response to external forces – requests from investors, business partners, etc. Generally, their own understanding of the concept and the related frameworks is very limited, which presents an immense opportunity to build that foundational knowledge, set goals, and lay the groundwork for future ESG initiatives. Novices may need help establishing their ESG strategy and vision and putting the fundamental processes and governance structures in place.

Supporters understand the value of ESG and its importance to their organizations, and are actively integrating ESG principles into some areas of their operations. In this stage, they are working to further develop their foundational ESG knowledge, establish strong ESG frameworks, and refine their approaches to ESG integration. The transition from reacting to external pressures has shifted toward an internalized drive, and with this momentum, organizations will deepen their engagement and expand their ESG horizons.

At least for now, Gamechangers make up the smallest group of the ESG Maturity Model. These companies are at the forefront of innovation, and, as such, are visionaries in the ESG world, setting benchmarks and pioneering novel approaches. They already have extensive, comprehensive ESG practices ingrained in their organizations, and continually elevate sustainability and responsible business practices. Gamechangers are adapting their business models to a low-carbon economy, identifying emerging ESG trends, and planning their path forward for others to follow.

Explore the model

Ready to step further into the different areas that make up ESG maturity – and assess your current status and plan your next steps? Explore our deeper-dive articles:

• Stakeholder engagement
• Strategy and roadmap
• Governance and culture
• Risk assessment and infrastructure – Coming soon! 
• Data and reporting – Coming soon! 

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A proven, integrated ESG methodology

Whether you are taking the first steps on your ESG journey or your existing program needs an overhaul, CohnReznick can help. Using a proven, integrated methodology that combines our own ESG experience with industry insights, we will help you effectively advance your ESG initiative at each step of its lifecycle.

Our four-phase approach is built on value creation and impact throughout the journey, and includes:

• Phase 1: Assess ESG current state, identify ESG priorities
• Phase 2: Design ESG strategy, roadmap, and KPIs
• Phase 3: Implement ESG initiatives with governance, technology, and training
• Phase 4: Validate process and data and report progress against KPIs

With a 35-year track record in community investment and shaping governance strategy, CohnReznick tailors ESG programs to meet industry-specific stakeholder requirements. Using a process rooted in advanced data analytics and exclusive primary research, we leverage a cross-functional team that delivers seamless execution and enables fast, integrated results for companies of all sizes and across all industry sectors.