An ESG strategy has the whole organisation behind it when every department can point to decisions it now makes differently. No internal campaign or report put together by finance achieves that on its own. It takes a clear division of responsibility: the board oversees, data owners supply the figures, and teams change the processes where impact arises.
Quick Overview
What you will learn:
- Why ESG strategies stall when they stay inside a single department
- What the ESRS expect of the board when it comes to oversight
- How to turn the double materiality assessment into a conversation with employees
- What HR, procurement and sales should each take on
Who this article is for:
- Board and supervisory board members responsible for strategy
- ESG coordinators and anyone preparing sustainability reports
- Heads of departments that supply data or need to change their processes
Reading time: 7 minutes
Why ESG Strategies Stall in One Department
It is a familiar story. A company appoints an ESG coordinator, the coordinator collects data from the other departments, and the report goes out on time. On paper there is a strategy, yet not a single purchasing, hiring or sales decision has changed because of it. Staff have seen it on a slide; it appears nowhere in their own objectives.
The problem is structural, not motivational. A company affects people and the environment at very specific points: when it picks a supplier, designs a product, draws up a shift roster or negotiates contract terms with a customer. If the strategy gives those points no part to play, the coordinator can do little more than describe them after the fact. Engaging the team, then, is less about enthusiasm than about whether the strategy hands decisions to named people.
There is good news here. EU rules already spell out much of this division of roles, and companies outside the mandatory reporting scope can use the standards as a ready-made map of who does what.
The Board: Oversight, Not Sponsorship
The legal frame is set by the CSRD, Directive (EU) 2022/2464 on eur-lex.europa.eu, and by the European Sustainability Reporting Standards (ESRS) in Delegated Regulation (EU) 2023/2772. The standards themselves are mid-revision: Delegated Regulation (EU) 2026/1563 on eur-lex.europa.eu enters into force on 10 November 2026 and applies to financial years beginning on or after 1 January 2027. For financial years beginning in 2026, a company can stay with the previous version (with or without the reliefs the new act provides) or switch to the simplified one.
Under the revised text, disclosure requirement GOV-1 deals with the role of the administrative, management and supervisory bodies in sustainability matters. The company has to say who on those bodies is responsible for material impacts, risks and opportunities, what relevant expertise the members have, and how the bodies oversee target-setting and keep track of progress. Where employees are represented on those bodies, the description of their composition says so. Incentive schemes tied to sustainability topics fall under GOV-2 (in the previous version the same ground is covered by GOV-3).
For engagement, the takeaway is simple. People take a strategy seriously once they see the board holding itself accountable for it. Sponsorship, in the sense of signing off a policy and giving a speech at the town hall, will not do that. Oversight with named individuals, targets and regular progress reviews will.
Double Materiality as an Employee Conversation
The double materiality assessment sits at the heart of the ESRS. A company examines both its own impact on people and the environment and the ways sustainability matters affect its finances. According to the revised standards on eur-lex.europa.eu, what the company learns from engaging with affected stakeholders is a key input when it assesses which impacts are material, and workers and their representatives, in the company’s own workforce and across the value chain, are among the typical affected groups the standard lists.
Seen this way, employees are not an audience waiting for a finished strategy. They are a source of evidence about where the company’s impact actually falls. Disclosure requirement SBM-2 goes a step further: the company must explain how the views of key stakeholders, including workers’ representatives, reach its management and supervisory bodies.
Materiality workshops tend to work best when they are run with each department separately, since every team sees a different slice of the company’s impact. The GRI Standards follow similar logic. The GRI Standards English Language page on globalreporting.org lists GRI 2: General Disclosures 2021 and GRI 3: Material Topics 2021 among the current documents, and a company that reports voluntarily can base its entire process on them.
Roles in the Team: From ESG Committee to Data Owner
A strategy that works needs several named roles, not just a coordinator:
- ESG committee or board committee: reviews targets and progress and settles conflicts between ESG and financial goals.
- ESG coordinator: runs the materiality assessment, keeps to the reporting calendar and makes sure the data is consistent.
- Data owner: the person in each department accountable for a specific metric, such as energy use, staff turnover, workplace accidents or supplier data.
- Process owners: change procedures wherever the materiality assessment has identified an impact.
Procurement and sales need particular attention, because they are where the company meets its value chain. Directive (EU) 2026/470 on eur-lex.europa.eu limited mandatory reporting to undertakings with net turnover above EUR 450 000 000 and more than 1 000 employees on average. It also shields smaller business partners: value-chain undertakings with an average of no more than 1 000 employees may refuse requests for information beyond set limits. Buyers at a reporting company therefore need to know what they can ask suppliers for, while the sales team at a smaller firm needs to know which customer questions to answer and when it is entitled to say no.
HR owns the part of the strategy that concerns the company’s own people, and it is also responsible for writing ESG into job descriptions, annual objectives and onboarding.
Read Also
- The CSRD directive: reporting obligations — who reports and from when after the amendments
- ESG reporting: where to start — the groundwork before a strategy
- ESG in business simulations — rehearsing ESG decisions as a team
Build Your Skills
To take this further, Sustainable leadership (ESG in practice) focuses on stakeholder mapping and a transformation roadmap, while ESG / CSRD: Sustainability Reporting covers reporting requirements and data. Get in touch and we will tailor the scope to your team.
Frequently Asked Questions (FAQ)
How do you build an ESG strategy for a company?
Begin with a double materiality assessment, not a list of initiatives. Sit down with each department to establish where the company affects people and the environment and which sustainability matters could hit its finances. Targets, metrics and accountable owners should follow from those topics, not the other way round. Without named owners, a strategy is just a statement of intent.
What role does the board play in an ESG strategy?
The management and supervisory bodies oversee material impacts, risks and opportunities: they appoint the people accountable, sign off targets and monitor progress. The ESRS require that role to be disclosed under GOV-1. Any link between pay and sustainability targets is disclosed separately, under the requirement on incentive schemes: GOV-2 in the new, simplified standards and GOV-3 in the previous version. Nothing tells staff more clearly that the strategy is meant seriously.
How do HR, procurement and sales get involved in ESG?
Give each of them the decisions that change because of the strategy. HR takes on workforce objectives and onboarding, procurement takes on supplier selection criteria and how much data to request, and sales handles customers’ questions about ESG. A good way to start is a separate materiality workshop with each of these teams.
Who owns ESG data inside a company?
The ESG coordinator gathers the data, but each metric should have an owner in the department that produces it, be that finance, HR, facilities or procurement. That way the data is looked after all year round, not just while the report is being prepared.