Collaborative ESG processes: Navigating risk and opportunity with Panu Kärävä

Sustainability and ESG considerations have shifted from being peripheral concerns to becoming central to an organization’s strategic direction.  We sat down with Panu Kärävä, a seasoned expert in ESG and sustainability, who now serves as an advisor to Inclus. Panu’s wealth of experience sheds light on the collaborative nature of ESG processes and their newfound significance.  

ESG: The evolution from energy efficiency and raw material sourcing into a Boardroom concern 

”Over the course of my career, handling ESG and sustainability issues from a variety of perspectives in different industries, I have witnessed the evolution of sustainability and ESG from targeted efforts in energy efficiency and raw material sourcing into fundamental strategic questions about the very direction and survival of businesses,” Panu Kärävä reflects.  

”ESG has essentially become a risk and opportunity management topic at the highest possible level of leadership and strategy.” 

In this shifting landscape, Inclus stands out with its innovative analytical and user-friendly software tool designed to facilitate ESG risk management processes. Panu Kärävä is quick to endorse this approach.  

”Inclus’ software tool is precisely what effective ESG risk management processes require today,” he affirms. ”ESG is fundamentally a process revolving around identifying, assessing, managing, and communicating risks and opportunities related to ESG issues. Inclus’ software tool not only streamlines these phases but also fosters collaboration, involving stakeholders from within an organization and throughout its supply chain. This is very much the reason why I got interested in Inclus in the first place.” 

“Automated systems cannot replicate the insights that human stakeholders have. They have a deep understanding of the company’s operating model and bring diverse ESG perspectives into the table. That process just needs to be made easy.”

He continues: “Involving stakeholders in identifying and assessing ESG-related risks is important because they provide a deep understanding of the operating model and bring diverse perspectives and insights that automated systems cannot replicate. Additionally, stakeholder engagement is essential for building trust, fostering positive relationships, and proactively addressing sustainability risks, as stakeholders often have a direct impact on a company’s ESG performance.” 

CSRD & ESRS: Forget ‘engagement as a best practice’. Stakeholder involvement is now mandatory. Period.  

One crucial development shaping the ESG landscape is the European Union’s Corporate Sustainability Reporting Directive (CSRD), which mandates increased transparency and accountability.  

As Panu points out, ”The CSRD will propel organizations to extend their sustainability management to cover all relevant aspects of the value chain, both upstream and downstream. What’s more, the Commission’s adoption of the initial set of 12 ESRS standards, in July 2023, is regarded as a substantial stride toward fostering sustainable practices and enhancing transparency among companies. This development will introduce far-reaching alterations to sustainability reporting, which will encompass approximately 50,000 EU-based companies.” 

This means that businesses will need to make additional strides in procurement and supply chain management, site-level ESG impact assessment, and engagement with affected stakeholders and workers in the value chain. 

In essence, the CSRD makes collaboration in ESG processes not just a good practice but a mandatory requirement. And this is precisely where Inclus’ software tools prove invaluable.  

”Smooth and easy-to-use, customized software tools are essential in navigating the complexities of ESG,” Panu emphasizes. ”They enable organizations to align with regulatory requirements, engage stakeholders effectively, and make informed decisions that drive sustainability.” 

Collaborative ESG processes not only mitigate risks but help unlock opportunities for innovation and growth

Mikaeli Langinvainio, CEO of Inclus, expresses his enthusiasm for Panu’s involvement: ” We look forward to leveraging Panu’s expertise to enhance our risk management software tool, ensuring that it meets the evolving needs of ESG-related processes. At Inclus, we view ESG through the lens of risk and scenario analysis, and we are committed to providing the tools and methodologies needed for sustainable success.” 

As ESG considerations evolve from a nice addition into a requirement and a Boardroom-level concern, Inclus, with its visionary software solutions and the guidance of experts like Panu Kärävä, is poised to lead the way in collaborative ESG processes.  

As businesses adapt to this new reality, they’ll find that sustainable practices not only mitigate risks but also unlock exciting opportunities for growth and innovation – involving not only individual organizations but entire value networks.