Customers & partners
With multiple stakeholder interests to consider, boards face ESG-related dilemmas more frequently. A dilemma arises when decision-makers face two or more conflicting options — each with drawbacks or moral concerns. They are rarely black-and-white and require navigating shades of gray.
In practice, management rarely shares them with stakeholders. This silence can undermine trust and raise questions about the integrity of sustainability efforts. At the core lies a vital question: Which value are we creating, preserving, or sacrificing, and for whom? The choice for one of the options often involve trade-offs between economic, environmental, and social value. It helps to define what is acceptable for each domain. How much GHG emission is too much? How much harm to nature or local communities is justifiable? Shared values like honesty, justice, responsibility, respect, and solidarity can offer direction.
To navigate dilemmas effectively, we recommend five steps, based on the work of prof. Mijntje Luckerath:
We believe that openly sharing these dilemmas and decisions in the annual report or on the website of the company builds trust, credibility, and shows what responsible leadership looks like.
Over the past few years we have guided multiple organizations through our ESG Dilemma Framework and helped them better understand value creation mechanisms, trade-offs and responsible decision making.
If you want to learn more about how we can advise you, reach out to Nicolette Loonen via nicolette@toscatribe.nl