The benefits of an effective Management System

BITCI News - Nov 01, 2022

How things have changed over the last three years! Our personal and professional lives have been transformed by the pandemic and even though Europe, and perhaps indeed the world are headed into a recession (where traditionally social responsibility would go straight to the back burner in “cost savings”) you might be wondering if this time will be different. The world seems different now with climate change and societal inequality at the forefront – the associated threats and opportunities have become Board level conversations. As your organisation’s Sustainability Lead, you might be feeling a bit overwhelmed, having to be on top of everything ESG. The fun days of community fundraisers and green teams are over, now your world is filled with gender pay gap reporting, establishing Science Based Targets (SBTs) and the soon to be Corporate Sustainability Reporting Directive (CSRD). With all these new regulations and reporting requirements, your ability to influence others to get necessary support, is a key part of your job…perhaps it is THE job. 

Even if you don’t think you’ll be required to comply with the CSRD, you’re still in the midst of the dawn of a new day. One that requires you to prepare your organisation for increased scrutiny around its environmental, social and ethical actions. So where do you begin to pick apart the complexity of ESG, get the necessary buy-in needed to progress meaningful action, and confidently report on the impact this is having for your organisation’s key stakeholders? In BITCI’s view, this is where the management system can help. The management system provides a foundation that you can apply to any ESG topic to develop a structure that embeds that topic into your organisation. And what does embedding get you? It gets you buy-in. It gets you resources. It gets you the support you need to take action.  

Key Components of the Management System: 

The management system is a governance structure, just like terms of reference for a Board, that sets out a way of working. It is a framework of good practices in logical progression that ensures the topic it’s applied to is built sustainably. BITCI view the management system as shown in the following diagram. 


The core elements of the management system we interrogate through evidence-based inquiry are: 

  1. Context: Overall, does the organisation have a formal and controlled system in place for the topic? This would be shown to us by a documented strategic commitment to the topic and evidence of the shaping of that commitment – in other words, the trends, organisational priorities and values, and stakeholder engagement actions that formed the organisation’s strategy.  
  1. Leadership: This element then breaks down the formal structure into its component parts – the strategy to achieve the commitment, the policies and organisational structures that govern the topic, and the role of the organisation’s governing body – particularly with respect advocating for the topic and then approving and resourcing It. Does the governing body actively advocate and participate in the governance of this topic? 
  1. Planning: This element looks for organisation plans aligned with the strategy and/or strategic commitments. The plans should have clear near-term objectives and targets and should state the metrics or key performance indicators that the organisation uses to assess progress against the plans.  Is the plan the sole responsibility of one person, or is there joint accountability? Is there sufficient budget allocated to result in meaningful actions being taken? 
  1. Taking Action: This element looks for actions to be taken, but not just any actions – actions should be aligned with the plan that is, in turn, aligned with the strategy. In taking action, the organisation should mobilise skilled resources and sufficient funding to achieve its plans. 
  1. Evaluation: Taking action isn’t enough though, the organisation should monitor, evaluate and report on the effectiveness of that action. This is once again linked back into the objectives, targets and KPIs that were developed in the planning cycle which then links back to the strategy. This also then links back into Leadership, where there is a Governing Body providing oversight on the effectiveness of the actions taken and directing any course corrections that might be required to achieve the targets stated in the plans.  
  1. Improvement: And then finally, the organisation should operate a formal continuous improvement process that, at least annually, assesses the effectiveness of actions taken thus far and incorporates any newly identified objectives based on new context (like stakeholder inputs, new trends, etc. 

 This management system structure might sound familiar to you if you’ve been through an ISO certification. For example, the ISO 9001 standard sets out the criteria for a quality management system. Your organisation might have ISO 14001 (Environmental Management System) certification. If so, then there are already people in your organisation who might be able to support your development of a management systems approach.  

Another potential support group could be Internal Audit. Auditors are generally familiar with management systems, and are also highly skilled at assessing the effectiveness of any system. Once established, taking your ESG management system through an internal audit might be a helpful way of improving it. 

And if you’d like to know more about management systems and the way we apply the structure to the Mark Version 5 content, just contact your BITCI Advisor. The mark certification process is an excellent way to develop an ESG management system. We’d be delighted to support you!