The tool provides tailored guidance on environmental, social, and governance (ESG) risk factors and a practical roadmap for manageable, systemic improvements.

Why this tool?

Midsize growth companies (MGCs) often share many sustainability challenges with larger firms but have limited resources and capacity, thus benefitting from tailored guidance and sustainability tools. The ‘Sustainability Assessment and Improvement Tool’ is intended to provide comprehensive coverage of sustainability risk factors relevant to MGCs and empirically validated recommendations to help companies manage associated risks successfully.

ESG versus sustainability

Companies are encouraged to focus on sustainability rather than the term “ESG” when discussing sustainability with company owners and managers. Investors increasingly demand businesses to account for ESG factors like environmental and social considerations, which can be conveniently divided into non-financial risks. However, sustainability is a broader concept that emphasises the company’s entire approach to running a business, making it more likely to survive and prosper in the long-term.

Using the tool

The tool is an Excel-based instrument organised into eight categories:

• Vision, values, and culture
• Decision-making and strategic leadership
• Human capital
• Risk governance and internal control system
• Audit
• Disclosure and transparency
• Ownership
• Governance of stakeholder engagement

Each category is framed around core sustainability principles that are supported by recommended practices. The Tool is designed to assist SMEs in conducting a structured evaluation of their current sustainability policies, practices, risks, and opportunities and identifying priority actions tailored to their business model and strategy.

Getting started: Scoping and orientation

Prior to using the tool, company advisers must conduct a preliminary analysis of which company characteristics and conditions are most important to its ultimate sustainability in the context of its history and growth trajectory. The ‘Scoping and Orientation Questionnaire’ provided in the appendix can help prepare advisers for conducting the Tool’s diagnosis and action planning exercises.

Conclusion

Overall, the tool is designed to assist MGCs in managing their environmental, social, and governance risks and support their long-term growth. By providing actionable recommendations framed around tailored guidance, the tool aims to be a practical resource that assists SMEs in transitioning governance, managerial, and organisational practices to adapt to new and changing circumstances.