Management consultancy IQbusiness and impact reporting and grading experts Paragon Impact have launched an environmental, social and governance (ESG) solution that serves as an analytical tool designed to give a business a complete view of how it interacts with government, society and the economy beyond its financial bottom line.

The team has also offered the Presidential Climate Commission access to the tool to enable a deeper understanding of the impacts that business has on the country's climate change goals and requirements.

“In a country with an unemployment rate of 46.6% on the expanded definition, the imperative of ensuring that big businesses, which are big employers and traditionally big polluters, make positive impacts towards better climate change outcomes, gender equality and inclusive economic growth cannot be ignored or filed away in a yearly integrated report,” the companies say.

The grading tool draws on myriad prescribed international frameworks and domestic laws to allow a holistic and honest “warts and all” evaluation and measurement of the impact that a business has on the environment and the society in which it operates. This solution provides an answer to the systemic problems and reporting costs that hamper business and economic growth in South Africa, IQbusiness and Paragon Impact state.

The grading tool is a cloud-based digital solution that evaluates a business’ ESG readiness and performance against several international frameworks. It measures a business’ alignment to the United Nations Sustainable Development Goals (UN SDGs), besides other requirements.

The 17 UN SDGs provide a global shared blueprint for peace and prosperity for people and the planet, now and into the future.

“While most businesses remain unaware of their impact on our shared natural and social capital, the Paragon +Grading tool helps organisations take the necessary steps towards achieving sound, fair and measurable outcomes when it comes to their ESG impacts,” says Paragon Impact founder Brett Wallington.

“Existing ratings are very inward-looking, they remain all about the company and its bottom line. We need to be smarter about how we look at the impact that businesses have on the world. What are the impacts of ESG from a business itself? How can a business make its impact more positive?

“There have been companies with excellent ESG ratings and huge reporting bills, but significantly negative real-world social and climate impacts. However, it is possible to flip this on its head. ESG reporting can be streamlined and the tool helps businesses gain a clear view of their actual, real-world impacts,” he says.

Critically, the solution assesses which requirements and goals actually apply when dealing with multiple reporting requirements, which ones are actually worth pursuing and what the real impact is on an ongoing basis,” says IQbusiness partner and Insights and Solutions team lead Kuda Mukova.

“If we can get ESG right, we can solve so many of our society’s problems; from sustainable management of precious natural resources, to treating our staff and communities well and working responsibly wherever we are in the world,” he adds.

The value of ESG tools for South Africa's society, economy and government was highlighted by President Cyril Ramaphosa during his State of the Nation Address when he said: “[South Africa has] made important strides in the fight against climate change and, at the same time, securing our economic competitiveness”, the companies aver.