Role of Scrum Masters in implementing ESG in Canada

As a Scrum Master, I've always believed in the power of agile methodologies to drive innovation and efficiency within an organization. As showcasing it, I've been critical in implementing Environmental, Social, and Governance principles. Many industries have implemented ESG since the UN assembly emphasized their importance. 

The industry uses ESG to refer to a commitment to sustainability and ethical practices. In Canada, where corporate responsibility and sustainability are becoming increasingly vital, ESG implementation is ongoing. 

Here is an overview of my experience as a scrum master implementing ESG.

What are ESGs?

Environmental Social Governance or ESG is a term used to refer to a set of criteria that is used to evaluate a company’s operations and performance in three aspects:

1. Environmental

This factor deals with the company’s environmental impact, such as carbon emissions, resource conservation, and waste handling. It is the result of the company's process. 

2. Social

Social factors relate to the company’s relationships with team members, such as employees, suppliers, customers, and communities. The industry must consider labor practices, diversity, and community engagement.

3. Governance

Governance is related to a company's leadership structure, ethical practices, and transparency, including board diversity, executive pay, and shareholder rights.

Whenever the company decides, consideration of all three aspects is mandatory. Canada believes in ESG for the development of the company and nation. In recent years, the rules and regulations have been organized and followed. 

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When Did ESG Come into Existence?

The process and functions of many companies have led to crucial environmental impacts, including pollution, climate change, and waste disposal, which have raised concerns among the public. To handle these challenges, the concept of Environmental Social Governance (ESG) has emerged. The concept promoted the alignment of corporate sustainability with environmental stewardship. The United Nations published a report titled “Who Cares Wins,” which outlines the importance of ESG factors and highlights the pressing concerns associated with them.

During the 1970s, companies used socially responsible investing to frame portfolios that matched their goals. Until 1980, Socially responsible investing positively impacted the industries by concentrating on social issues and the country's supply chain ethics.

In 1990, the ESG started evolving. The businesses began understanding the importance of ESG and the financial performance it can result in, as well as the concern over the society it creates. The process also had ways to find the risks involved, like waste production, greenhouse gas emissions, etc. 

The base for the ESG came from the Triple Bottom Line. John Elkington reported the three essential Ps for the business. People, Planet, and Profit are the 3 bottom lines that significantly impact business investment. 

After all, when the UN government announced the statement Who cares win in 2004, the ESG became the official evaluation of the investment of any businesses. Industries in Canada effectively use the ESG for the country's social and economic development.

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What are the Regulations in ESG?

ESG may benefit the environment but is challenging to understand and overcome, so some regulations are constituted. Regulations are constituted to showcase the transparency and accountability of the companies to the stakeholders. ESG has some regulations to follow to make information about the actions performed by the companies. 

1. Sustainability Disclosure Requirements (SDR)

A Sustainability Disclosure Report is important for improving company sustainability transparency. This regulation requires that all information disclosed by the company be accurate. The company must disclose details like carbon emissions and labor practices. 

This regulation, developed by the UK Financial Conduct Authority in late 2023, raises investors' and stakeholder management awareness of the data required for making decisions about sustainable investments.  

2. The Sustainable Finance Disclosure Regulation (SFDR)

Sustainable Finance Disclosure Regulation is a regulation that showcases how businesses integrate ESG risks and opportunities into their business investment decisions.

The regulation discloses sustainability risks in investment strategies. Details on the adverse impacts related to investment decisions. This regulation improves transparency in the financial sector and encourages sustainable investments.

The European Parliament formulated this regulation, and it became mandatory in 2023. 

3. Non-Financial Reporting Directive (NFRD)

The Non-financial reporting directive needs some large-scale companies to showcase their non-financial information related to environmental matters. Other factors are social and employee-related, human rights, anti-corruption, and diversity.

Reporting all information like business policies, process outcomes, and risks involved in non-financial issues. This regulation gives stakeholders a complete idea of a company’s non-financial performance. European Union framed this regulation and implemented it in 2016.

4. The Corporate Sustainability Reporting Directive (CSRD)

Corporate Sustainability Reporting Directive has replaced the NFRD. To improve reports from many companies on sustainability and the quality of disclosure reports.

To increase the scope, many companies require audits of information. Compulsory compliance with EU sustainability standards was needed. This regulation ensures a business's reported sustainability is consistent and reliable across the EU. CSRD regulation was formulated by the European Parliament in 2023. 

5. The Corporate Sustainability Due Diligence Directive (CSDDD)

The Corporate Sustainability Due Diligence Directive is a regulation that mainly focus on companies conducting due diligence. This regulation helps in finding adverse impacts involved in the processes.

Companies should identify the risks involved and take necessary actions to eradicate them. This regulation was framed by the European Parliament in 2023.

6. Streamlined Energy and Carbon Reporting (SECR)

Streamlined Energy and Carbon Reporting is a regulation that requires large companies to report on their energy use and carbon emissions—disclosing the details of energy consumption and greenhouse gas emissions.

Reporting on energy efficiency measures taken. To encourage transparency in energy use and promote efforts to reduce carbon footprints. The UK government created this regulation. 

These regulations stick to ESG and are increasingly adopted by various companies to align environmental sustainability with business objectives.

Also Read: How Certified Scrum master boosting canada manufacturing?

What is the Importance of Implementing ESG in Canada Industries?

Governing the decisions of the industries requires ESG consideration because the adverse effects on the environment and society need to be retrieved and reduced in the future. There are many other important reasons, like the following:

1. Increased Innovation 

The environmental and social effects of different industries will require many considerations. Situations like waste management, efficient energy utilization, raw material shortage, and so on will emerge during ESG implementation. To overcome such situations, industries may develop innovations like recycling, green energy, and alternative energy sources, which are innovations developed while considering odd situations. So, the chance of innovations is high when the implementation of ESG.

2. Business Development Opportunities  

The technology used nowadays is more efficient and powerful, and technology, learning, and networking are becoming more manageable. Positive utilization of technology can increase the chance of new developments and create industry opportunities. 

Social awareness is also spreading more widely among users and stakeholders. The concept of sustainable brands and products is more prevalent now than ever, creating new business opportunities for multiple industries. 

3. Create Investment Opportunities 

Society's business opportunities attract investors to sustainable products and practices. Investors nowadays are well aware of the conditions and situations of industries and implement them in their use. A company with ESG can sustain itself in the market longer than other companies without ESG practices. 

4. Cost Savings 

ESG regulations have become mandatory, and companies that do not follow them may be fined. This regulatory consideration can cause collateral damages, such as shutting down operations and legal strikes, affecting any industry. In some cases where the industry is involved in production, the product cost may be affected because of not following ESG regulations in that industry. 

By implementing ESG regulations, companies can avoid and overcome this situation, saving on investment costs.  

5. Increase and Retain the Talents

ESG process can keep the organization competitive and growing. The sustainability of the organization can attract and retain talents. 

How can Scrum Master help Implement ESG in Canada Organisations?

The Scrum master’s role can be handy in implementing ESG in organizations. The roles and responsibilities of the role make the implementation correlate with the company’s goal. Here are some of the contributional actions taken by Scrum masters: 

1. Promoting ESG Principles

The essential responsibilities of a Scrum Master are to promote the core values of Scrum like:

• Transparency

• Inspection

• Adaptation

All these principles are important for implementing ESG. By encouraging my team members, the Scrum Master can guide teams in understanding environmental sustainability, social responsibility, and ethical governance in my work processes.

2. Coaching and Mentoring

My scrum master role includes coaching teams to become more self-organized and cross-functional. This can be leveraged to guide how teams can incorporate ESG into their daily tasks. By educating team members about ESG concepts, the Scrum Master can build awareness of how environmental, social, and governance issues affect the organization’s success and reputation.

For example, I mentored team members to check the lifecycle of product and it’s environmental impact. I guided them in considering social equity and governance standards in decision-making.

3. Prioritization and Backlog Management

One of Scrum's most critical elements is managing the product backlog to ensure priority. My role is to lead prioritization during sprint planning. In terms of ESG, ensure that ESG initiatives are sorted out to match the business goals.

4. Removing Impediments

My primary responsibilities is find obstacles that stop team’s progress and remove it. Regarding ESG initiatives, these obstacles may include a lack of awareness about ESG best practices, resistance to change, insufficient resources, or regulatory barriers.

5. Continuous Improvement

The Scrum framework is built around continuous improvement through regular retrospectives. The Scrum Master helps improve a culture of reflection and learning within the team. In the context of ESG, this means creating opportunities for the team to evaluate how their work impacts the environment, society, and governance standards.

During retrospectives, the Scrum Master can encourage the team to assess their ESG efforts—whether they have reduced waste, made strides in diversity and inclusion, or improved governance standards. The Scrum Master can facilitate open discussions about what is working and where improvements can be made, helping the team identify concrete steps to enhance their ESG contributions.

How to Improve ESG Performance?

To fasten the implementation and improve the ESG effectiveness over the business, the following steps will be helpful:

1. Set Implementation Structure

Identify your key people, identify customer requirements, and identify resources to support your efforts.

2. Evaluate Issues 

Evaluate and identify the critical ESG impacts caused by the respective business. The B Corp assessment can help identify these effects. The top priority is to prioritize the issue and devise a plan to overcome it. 

3. Decide the Achievable Targets

After a complete inspection of the business process and its social and environmental performance, an achievable target will make the implementation effective. Regular data collection is conducted to check the progress and ensure the organizational goal is on the right track.

4. Create a Plan and Act

The regulations are framed as objective that a team must follow. The organizations' regulations and goals must be compared, and a plan must be made for the implementation. The process must be continued based on the implementation and calculation of success.

The sustainability goal must be an ultimate target to reach the plan, and action must be continued to achieve it.

5. Refine the Methodology

The implementation of ESG is constantly updated based on the effect of industries on the environment and society. Thus, it is a continuous process, and the approach must be updated continuously. 

Conclusion

ESG initiatives within Canadian organizations are prevalent. By promoting ESG principles, coaching teams, prioritizing ESG tasks, and removing obstacles, Scrum Masters can guide organizations toward more sustainable, socially responsible, and ethically governed businesses. Scrum Masters are capable of a lot more. CSM Certification will be the best choice for learning more about the scrum master role. Implementing ESG into an organization positively affects broader societal and environmental goals, helping to create a more sustainable future for all.