ESG strategy and resilience business

In 2015, my life changed forever when a devastating train derailment occurred on my way home from a regular business trip on the East Coast. During my long recovery period, I had ample time to research and reflect on the concept of resilience. Since my return to work and assuming leadership responsibilities on environmental, social and governance (ESG) issues at Organon, I have made substantial contributions to the strategies that make us resilient, both personally and as a company. I’ve seen duplicates.

I was once told that one of the reasons I survived an injury that was expected to be fatal was because I was in good physical and mental shape. Similarly, resilient companies are those that have invested in their ability to anticipate, embrace, and adapt to change to support their long-term success. Just as an occasional sprint doesn’t get you ready for a marathon, an occasional crisis simulation doesn’t build the “resilience muscles” your company needs to respond to the moment.

Below are four ways individuals and businesses can strengthen their resilience muscles.

1. Live with purpose. When I was thinking about returning to work, I wanted to focus on purpose and impact. Having a clear corporate purpose and acting on it is an essential part of organizational resilience. A clearly defined purpose is a great cohesive and motivating force that keeps everyone rowing in the same direction when the waves get rough.

A robust ESG strategy enhances your ability to meet your objectives by supporting business resilience and meeting the changing expectations of customers, investors, regulators and employees. Thoughtful ESG target setting and reporting require sophisticated analysis of long-term risks and opportunities, require regular review and reassessment, and build critical constituent trust. All of this supports organizational resilience.

2. Gauge your mood and motivation. Any doctor will tell you that mood and motivation are related to health and recovery. Likewise, employee well-being is a key component of any of his ESG strategies. The COVID-19 pandemic and “big resignations” have highlighted the importance of maintaining a healthy and motivated workforce. Investors are increasingly interested in additional disclosure of human capital metrics, such as data on employee turnover, engagement scores and diversity metrics. These metrics are not only important indicators of organizational health at any given time, but also show the resilience of your workforce.

3. Strengthen your network. Researchers have shown a link between stronger social support networks and faster recovery from trauma. In business, meaningful relationships with various external stakeholders (community leaders, thought leaders, policy makers) also enhance resilience by providing allies during disruptive events.

In the extractive industry, there is a cautionary tale that business will be disrupted if the local community is not consulted and engaged. There are similarities with the pharmaceutical industry, which faces significant political and regulatory risks that should not be ignored. Responsible pricing, commitment to access, workforce diversity, and clinical trial diversity are just a few of the issues that stakeholders are watching closely. Rather than evading these challenges, resilient businesses work with partners to address them.

4. Anticipate pain. This is the medical advice I received during my recovery. It’s also important to stay ahead of the game given the increasing regulation in the ESG area. The U.S. Securities and Exchange Commission will formally enact rules on ESG disclosures this fall. The EU recently passed a directive requiring companies not based in the EU to also submit his ESG report. As companies await regulatory action and begin preparing for a new world of mandated fully audited disclosures, the potential complexity and cost of compliance is high.

There is a Tibetan saying that wisdom is like rainwater. Both gather in low places. I also know pharmaceutical leaders who adore the adage that crises are dreadful to waste. Adversity provides learning opportunities. That learning is worth it, but I know from personal experience that it’s far better to avoid those low spots in the first place. It takes some pre-planning and resilience muscles to help you avoid the storm, or at least ride it out safely.

Jeralyn Ritter, Head of External Relations and ESG at Organon and author of Bone by Bone. In this role, the focus is on guiding and shaping how the company interacts with key stakeholders and the environment.