Strategy is not Planning

Many consultants offer ESG planning but often label it as an ESG strategy. It’s crucial to understand the difference.

In the strategy world, the distinction between strategy and planning is well-defined. Strategy is not planning. Strategy is about making hard choices; planning is about organizing actions. ESG’s popularity may partly stem from its planning nature, which promises a single direction—becoming more ethical, responsible, and sustainable. This approach reassures executives in the boardroom. It’s straightforward, and people tend to favor straightforward solutions. Strategy, however, demands a set of coherent, risky choices that allow a business to differentiate itself from competitors, often by deciding not to compete on certain fronts. This is challenging.

If companies truly aim for an ESG strategy, rather than mere planning, their focus must be tailored to their current stage of development. This shifts the question for executives from:

“What parameters are others using to rate companies, and how can we implement actions to score well?”

to:

“Which ESG factors matter most to our specific business context? How can we leverage our unique resources and strengths to create meaningful, sustainable impacts for our stakeholders?”

By targeting the ESG factors that align with the company’s strengths and position, executives not only build a positive impact that may be harder for competitors to replicate, but they also enhance their strategic position. This approach offers a genuine source of competitive advantage, setting the business apart.

ESG Marketing isn’t a Long-term Solution to Corproate Social Responsibility.

While ESG marketing can temporarily bolster a company’s reputation, it lacks the depth and long-term impact of authentic CSR practices and can backfire if the company fails to deliver on its promises.

Embracing accountability