What is ESG?

ESG, which stands for Environmental, Social and Governance, is a framework used to measure and evaluate an organisation’s wider impact on society and the environment, as well as its internal management and leadership.

Moving away from purely focusing on educational performance, ESG provides stakeholders with a better understanding on how educational institutions are integrating initiatives like sustainability into their everyday practices.

The importance of ESG for educational institutions

As we collectively move towards a Net Zero future, issues of ESG and sustainability are becoming increasingly crucial to societies and the actions of organisations are being ever more scrutinised.

As a result, an organisation’s stakeholders closely monitor their actions and rely on available reports to assist them in making sound decisions. For educational institutions, the concerning stakeholders include: parents, students, graduates, faculty, board members, overseers, prospective investors, insurance providers, vendors, and the surrounding community.

While providing ESG related policy documents is not yet a legal requirement for schools, there are still a number of benefits that can follow from doing so.

Reasons for creating an ESG strategy

• Ethical Responsibility

Educational institutions bear an ethical responsibility to champion sustainability, social equity, and transparent governance. They must integrate these principles into their operations and curriculum to foster a culture of environmental management, inclusivity, and accountability.

By promoting sustainability and having an active ESG strategy in place, the fight against climate change can commence through those clear and purposeful actions, acting as a benchmark to consistently improve on.

It additionally encourages equity by ensuring all students have equal opportunities, while transparency in governance enhances trust in decision-making processes, reinforcing the institution’s commitment to ethical conduct and principled actions.

• Improved Reputation

Trustworthy behaviour and transparent communication surrounding ESG initiatives contribute to enhancing a school’s reputation. An organisation known for its ethical practices, environmental stewardship, and commitment to social responsibility can attract positive attention from the community and potential partners.

• Enhanced Stakeholder Relationships

Trust is essential for building positive relationships with stakeholders such as students, parents, teachers, staff, and the broader community. When stakeholders trust the school’s leadership and commitment to ESG principles, they are more likely to actively engage in sustainability efforts, provide valuable feedback, and support the school’s initiatives.

• Staff Attraction

Having a set ESG strategy and clear sustainable practices may also lead to easier staff retention and attraction, as well as boosting employee morale, as more ecological corporations are becoming increasingly more desirable to work for.

• Risk Management

ESG strategies help identify and mitigate risks associated with environmental, social, and governance factors, safeguarding the institution’s long-term viability and resilience.

• Cost Benefits

Adopting ecological practices, while sometimes requiring costly up-front capital to implement, often leads to lower long-term running costs. Increased energy efficiency, for example, will achieve this through taking simple measures such as switching to LED bulbs.

• Sectoral Policies

The DfE’s recently updated policy paper titled ‘Sustainability and climate change: a strategy for the education and children’s services systems’, while largely focusing on environmental actions, covers plans on integrating standardised reporting.

Although it is not currently mandatory, the necessity for consistent reports is underscored by plans to collaborate with the Department for Business, Energy and Industrial Strategy (BEIS) to establish guidance for monitoring and reporting emissions in the education sector. This initiative aims to facilitate and promote reporting practices, anticipating their eventual inevitability.

The DfE also aims to gather emission data directly from schools through energy providers, unless individual schools choose to opt out. By 2024, all schools should be reporting their emissions using a standardised framework.

Further initiatives outlined in the policy encompass:

• Introduction of a new GCSE on natural history
• By 2025, each educational institution will designate a “sustainability lead”
• Implementing carbon literacy training for at least one individual in every school by 2023
• Establishment of ‘Let’s Go Zero’ targets for schools
• Phasing out of single-use plastics by 2025
• Issuance of annual progress reports

• Long-term conformity

As a result, being early adopters of ESG and sustainability practices will likely aid in shaping future regulations that have yet to be introduced and mandated, thereby promoting ongoing compliance and adherence.

ESG in Schools, Academies and MATs

Despite the Department for Education (DfE) publishing the ‘Sustainability and climate change strategy’, there is still no set framework for organisations to follow. Being able to comprise a school’s sustainable actions and ESG impacts into one document will also likely be too challenging and complicated to achieve.

Instead, we suggest that schools initially craft an overarching and comprehensive ESG strategy, which can then provide the scope from which more specific ESG-related policies can be derived.

Steps to creating an ESG strategy

1. Gain senior management backing

The first step should be to acquire support from the educational institutions’ higher-level leadership and management positions in embracing an ESG strategy. These positions may include headteachers, CEO’s, the Board of Trustees, and the Chair of Trustees.

They should provide a foreword regarding the upcoming strategy, outlining and expressing the school’s upcoming commitment to sustainability.

An ESG director ought to then be appointed to provide stable leadership and guidance when moving forward with developing and performing the strategy.

2. Assess current ESG position

Conduct a thorough assessment of the school’s current environmental, social, and governance practices with the key stakeholders surrounding the school.

This will establish a baseline to understand the group’s starting point regarding ESG performance, helping to measure progress and effectively identify areas for improvement.

These actions involve examining how to improve the school’s energy efficiency, waste management, community engagement, diversity and inclusion efforts, governance structures, and other relevant factors.

3. Perform a Materiality Assessment

With an established baseline of current sustainability performance set, the organisation’s stakeholders can be engaged and consulted through a ‘materiality assessment’.

A materiality assessment looks to identify and prioritise the key ESG issues that are of most significance to the organisation, ensuring resources and efforts are adequately distributed to key areas.

4. Set clear and purposeful goals

Once the key ESG areas have been established, specific, measurable, achievable, relevant, and time-bound (SMART) objectives must be set.

These objectives will be prioritised in accordance with the previously ranked ESG issues and will align with the school’s overarching mission and values.

5. Allocate resources

Adequate resources, including financial, human, and technological supplies must be allocated to successfully perform the upcoming changes to the school. This may involve investing in staff training, infrastructure improvements, and technology upgrades.

Future budgeting processes must therefore incorporate the ESG related considerations.

6. Implementation and Action Planning

At this stage, all the key elements have been covered for the school to be able to comprehensively produce a detailed action plan, breaking down the potentially large-scale project into smaller and more manageable ones.

This process generates a roadmap, detailing all necessary steps to reach the ultimate objective. It includes required resources, completion timeframes, and assigned tasks for individual members. Gantt charts are frequently utilised to organise and visualise the project’s progression.

Schools may look to develop a ‘Project Team’ assigned with the responsibility of overseeing the implementation of the strategy and harbouring individual responsibilities to achieve this.

7. Reporting results

The final stage is to set up systems to systematically monitor the performance on an ongoing basis, ensuring you are collating data for analysis ready to be transparently communicated to the stakeholders.

Consistently tracking key performance indicators (KPIs) against the ESG objectives allows you to pinpoint opportunities for enhancement and adjust strategies to match shifting priorities and emerging obstacles.

An adequate reporting system must then be established, such as through annual ESG statements, that can easily communicate achievements and progress through various channels, including a school’s website, newsletters, social media etc.

Integrating ESG and sustainability into your curriculum

Given the school’s heightened emphasis on sustainability and ESG practices, there’s no better moment to engage students, especially with the DfE’s emphasis on sustainability.

This exposure enables them to grasp crucial global concerns such as climate change and social inequality, nurturing their critical thinking abilities and shaping them into responsible global citizens. Incorporating ESG and sustainability into the curriculum not only meets educational requirements but also empowers students to drive significant positive transformations.

How Eddisons Education can help

With over 150 million pounds secured in funding and a team of 60+ experienced surveyors, Eddisons Education is uniquely positioned to support schools, academies, and MATs in enhancing sustainability and integrating ESG principles into their operations.

With expertise ranging from enhancing schools’ energy efficiency to conducting comprehensive condition surveys, Eddisons Education possesses the capability to project manage ventures of any scale, whether you oversee a village school or a multi-academy trust.