If you haven't noticed the "ESG" acronym, you'll likely see a lot of it in the next few years. What is ESG and why is ESG reporting important? "ESG" stands for environmental, social and governance, and it describes a company's strategy regarding conservation of the natural world, considerations for people, and standards of running its company.
While some companies look at this as a compliance exercise, LP Building Solutions sees its ESG report (which it calls a Sustainability Report) as a tremendous opportunity. Let’s see how you can take these sustainability success stories and make them your own.
ESG reporting often uses a metrics-based framework to help companies communicate their ESG initiatives to investors, employees, customers, and other stakeholders. ESG reporting frameworks measure and assess a company's performance on how a company is managing business risks and opportunities related to three key factors:
For LP Building Solutions, ESG reporting serves a bigger purpose. It serves as the foundation to help the company tell its sustainability story.
"Putting out a sustainability report allows a company to talk about all those things they are doing well," says Nicole Daniel, Senior Vice President, General Counsel and Corporate Secretary at LP. "It helps us tell the world about LP, how we are good stewards, and how we govern as an organization. It's more than compliance. It ties back to the purpose and ethics of the company."
One of the biggest hurdles an ESG report presents is learning to identify and collect the right data. While LP does a tremendous job of collecting data for its long-standing sustainable forestry operations, for example, LP's annual ESG report showcases significantly more data that requires tracking and aggregation.
“We found we needed to be more purposeful about collecting certain types of data so we could establish goals,” says Daniel.
For United States companies ESG reporting is currently voluntary, but Daniel is forecasting proposed U.S. Securities and Exchange Commission rules could require companies to disclose their environmental, social and governing policies in the future. "Since we spent the past two years being thoughtful about collecting data and understanding our baselines, we are in a better position to be ready to meet those requirements should any new regulations pass," says Daniel.
After completing LP's inaugural sustainability report in 2021, Daniel was proud to "promote the good" by telling LP's long and storied history of sustainability. The report helps illustrate its sustainability efforts across the entire organization and the company's commitment to Do the Right Thing Always.
"We believe in the product and the people behind our products. Our 2021 Sustainability Report tells our story in a way that lets people read cover-to-cover or scan a few pages," says Daniel.
Importantly, Daniel notes that LP's people are critical to the company's sustainability story. Any ESG efforts that come to life are a result of their hard work. Led by Donna Kopecky, Director of Sustainability and Public Policy, the sustainability team takes care to promote LP's dedication to these efforts and to work toward better solutions every day.
Many customers are looking for products from companies that match their values and are good corporate citizens.
"A lot of customers are building their first homes, and they have a higher level of awareness of the environment and their impact on society. There are also many builders who are aligning themselves to be more sustainable and building homes with sustainable materials," says Daniel.
“LP fits so beautifully with our carbon-negative product, LP® SmartSide® Trim & Siding, and our LP® Structural Solutions Portfolio, which help builders solve problems,” says Daniel. “There are so many ways our products can help build better and more sustainable homes, and it’s a great opportunity when a builder can use that as a differentiating attribute when marketing their homes and creating their communities.”
Daniel says the same goes for distributors and retail locations. "They want to showcase products that have a good environmental impact."
Not every customer holds sustainability as a priority, but most customers are eager to understand the products used to build their new home come from sustainably managed forests.
Use LP's Sustainability Report to educate homebuyers just as you would discuss how LP Structural Solutions products help better insulate homes or provide greater protection from water infiltration. Each one of the LP products used in a new home tells a story about sustainability.
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