How to get started with ESG in Newly Public Companies
with Kim Kerry-Tyerman, VP, ESG Strategy & Engagement at Billtrust, August 31, 2022
Over 90 people registered for our event with Kim, following up on two successful series: How to Get Started With ESG: Venture Capital and How to Get Started with ESG: Startups. Here’s a brief overview of what we covered, including Kim’s tips for success.
I. ESG as a corporate function is quickly growing
Per EY, ESG has become sector agnostic. We’re seeing this with clients too. Companies can no longer ignore broad stakeholder interest in ESG and are trying to come up to speed on multiple fronts. Organizations are also working to get multiple internal stakeholders up to speed and find internal ESG talent. In many cases, this is a new function for companies, and it comes with a learning curve, especially for those that are dealing with the requirements associated with a public offering.
II. Stakeholder urgency is driving ESG popularity
ESG is coming to the forefront of companies’ agendas through multiple stakeholder groups — ratings agencies, investors, vendors, executives, employees, customers and board members. The range and interest of stakeholders are helping companies move from a stance of recognizing the value of ESG to needing to take immediate action to show progress. Employee pressure is helping move companies to act and report on ESG, while investors make up a significant portion of newly public companies’ interest in ESG.
III. Ignoring ESG investing is now a risk
Newly public companies are eager to please their investors. As the assets under management designated as “ESG” investments grow, it behooves companies to pay attention to these designations. “As global climate change and energy supply constraints intensify, companies that have embedded ESG into their core business values and operations should attract more investors and higher valuation,” according to EY. According to Morgan Stanley, “Emerging public companies run the risk of leaving some investors on the sidelines if they aren’t taking a thoughtful and strategic approach to sustainability.”
IV. What are the challenges newly public companies face with ESG?
First is the question of regulation and the rules around reporting, risk disclosures, and the selection of one or several disclosure frameworks. The continued anticipation of forthcoming SEC rules is getting companies to move a bit quicker on reporting out their risks and putting processes in place to report annually.
Frameworks including SASB, GRI, and TCFD all provide critical decision markers for companies. Now, companies need to choose where and how to disclose; many executives feel frustrated that the decision of where to disclose falls on them, instead of on regulators.
Companies are trying to ramp up multiple stakeholders quickly so they can start making an impact on their material issues. Hiring talent, securing resources and getting employees engaged can each be a full-time job, but many executives are nonetheless adding ESG functions to existing roles.
Finally, the other challenge companies face once they’ve decided to act on ESG is approaching the consideration of material issues. Companies must figure out where and how to focus. Which issues should they tackle first? Should they do a materiality assessment?
V. Case study: Billtrust
Luckily, we had Kim Kerry-Tyerman’s experience to help us bring many of the market issues down to earth. Kim has broad experience in ESG, as she has spent over 15 years developing corporate responsibility programs. Before Billtrust she grew Adobe’s social impact program and engaged their 24,000 employees around community partnerships and the company’s social impact. She now leads ESG at Billtrust as their first ESG hire. Having worked with Kim firsthand I can tell she is an expert at cross-functional engagement, communicating the value of ESG across departments and building an ESG program from the ground up. Kim Green Buoy Consulting to deliver Billtrust’s first greenhouse gas inventory, one of many steps Billtrust is taking to ensure they have a strong ESG value proposition.
Billtrust went public in 2021, and has since acquired two companies. It now has 800 global employees. Like many other newly public companies, it’s rapidly growing. Kim is responsible for leading Billtrust’s ESG function to ensure the company grows in alignment with its corporate values.
Kim spoke candidly about her experience building a program from the ground up, completing her materiality assessment in-house and figuring out how to navigate a path that doesn’t go exactly as planned. Here are some of her lessons learned and tips for others in her position:
- The closer the ESG role sits to leadership, the more progress you will make. It’s critical that the person responsible for ESG has the full support of the executive team and can make the key decisions necessary to drive projects forward. Without executive buy-in and support, a program risks slow progress, limited visibility and minimal impact.
- Conduct a materiality assessment with whatever resources you have as soon as possible. A materiality assessment is a truly critical piece of developing an ESG program. Kim made the argument for doing it in-house if necessary and “just doing it” to keep moving ESG progress forward. Workiva has excellent resources for completing a materiality assessment yourself.
- Pay attention to frameworks while being patient with your data collection and reporting progress. Data collection is an often underestimated piece of an ESG program. Each company’s data collection, process and silos are unique. It’s critical to take a high-level view while engaging directly with data-holding stakeholders.
- Finally, be clear about your function’s value-add. ESG visibility can feel like an unnecessary extra layer to an executive. Because ESG touches a variety of company functions, an executive needs to be crystal clear on the value ESG brings to each department and how they see departments working together effectively.
VI. Final thoughts
Newly public companies have a lot to grapple with, and many are trying to fit ESG into their other functions alongside challenging growth targets. Evaluating the landscape and taking lessons learned from Kim can be a valuable help for any organization. We hope this encourages companies to see the value of integrating ESG in their IPOs and the exciting months after.
If your organization is looking for help developing or implementing your ESG strategy, get in touch! We’d love to continue the conversation.
