Building an innovative sustainability culture through ESG certification

Abstract

With the growing focus on organizations’ environmental, social, and governance (ESG) performance, many companies consider obtaining certifications that attest to the sustainability of their products, processes, or organization. The multitude of available certifications to choose from, however, can cloud decision-making when seeking the right certification. Certifications can also be costly, and compliance with their requirements can be onerous. At the same time, organizations also tend to struggle with aspects of building innovative cultures to find ESG solutions—notably, processes and resources. This article first demonstrates that ESG certifications and their required compliance can fill in the missing gaps in innovative cultures—fostering rather than hindering them—and then provides a framework for managers to consider when evaluating sustainability certifications. Compliance with certification has often been thought to impede innovation, but we link this decision-making process to supporting a culture of innovation within the organization, increasing the likelihood of innovative solutions to ESG problems.