Developing Effective ESG Strategies: Insights from Michael McCain, CEO of Maple Leaf Foods

The corporate world is experiencing a shift toward Environmental, Social, and Governance (ESG) strategies, driven by increasing awareness of climate change, societal expectations, and the necessity for sustainable business practices.

The push for ESG strategies is seen not just as a matter of compliance but as good business stewardship, addressing the urgent need to adapt to evolving environmental and social conditions.

Despite this, ESG strategies often face scrutiny and criticism for being superficial or mere public relations exercises, known as greenwashing.

As Michael McCain, the Executive Chair of Maple Leaf Foods notes, it’s important to problem-solve for both commercial success and societal challenges by integrating ESG practices into their everyday workflows. It’s something he’s focused on bringing to life at one of Canada’s largest producer of food products, and one he recently shared some thoughts on with leaders at RBC.

Here are some of his key thoughts and takeaways.

Adopt a Problem-Solving Mindset

One of the most critical first steps in developing an ESG strategy that will resonate with stakeholders is to adopt a problem-solving mindset – one that involves identifying core issues within a business that intersect with its operations.

For instance, companies in the agricultural sector might focus on sustainable farming practices to reduce their environmental footprint. Those in the manufacturing industry might prioritize energy efficiency and waste reduction.

By clearly defining the problems they aim to solve, businesses can create targeted and effective strategies that lead to meaningful outcomes. This approach shifts the focus from mere compliance to addressing real-world issues that affect both the business and its stakeholders.

“It’s about actual problem solving and finding a way to define the problem in your landscape,” McCain explains. “[Solving for something] that’s a multi-stakeholder problem and then transitioning that solution into something that’s good for the enterprise is where the business strategy [can come in].”

Set Clear Goals

Once a problem has been identified, the goal for businesses should be to set clear goals. McCain notes, for him, this is paramount for any successful ESG strategy.

McCain notes that at Maple Leaf Foods, leaders committed to a vision of trying to become the most sustainable protein company on earth. This involved assembling various initiatives into a purposeful journey for the enterprise.

“From that point forward, virtually everything we did was connected to this broad definition of sustainability,” he notes. The company’s ambitious goals were not just lofty statements but were integrated into the organization’s core business strategy, guiding every decision and action, acting as a roadmap and serving as a benchmark against which progress could be measured.

Leverage Expertise and Collaboration

From there, McCain stresses the importance of working with external experts and stakeholders to drive sustainable initiatives.

“We embraced a guy out of Harvard who’s written a lot about this along with Michael Porter. His name’s Mark Kramer. We had Mark Kramer in as an advisor on the topic,” McCain shares. “He really opened our eyes to the difference between ESG and shared value propositions.” (Kramer, it should be noted, is quite critical of ESG initiatives because many lack substance and are focused on risk or reputation management rather than creating tangible change.)

McCain adds by collaborating with external thought leaders and integrating their insights into plans of action, businesses can have greater confidence that their ESG strategies are effective.

Focus on Integrity and Authenticity

A significant challenge when developing ESG strategies is avoiding greenwashing – the practice of making misleading claims about the environmental benefits of a product or policy. Greenwashing can severely damage a company’s reputation and erode trust with consumers, investors, and other stakeholders.

There is a real risk, McCain notes, that strategies can be developed to “tick a box” and, as a result, they’ll “lack substance” and won’t drive “real progress.”

To counter this, McCain advocates for genuine, integrity-driven approaches that focus on solving real problems rather than just enhancing the company’s image. He believes that authenticity in ESG practices not only builds trust with stakeholders but also drives long-term value creation.

To get there, businesses must ensure their ESG claims are backed by tangible actions and measurable results. Transparency is key; companies should regularly report on their ESG performance, including both successes and areas for improvement. Engaging third-party auditors to verify sustainability claims can further enhance credibility.

Embrace Continuous Improvement

Lastly, and perhaps most importantly, McCain notes the journey towards sustainability is ongoing and requires continuous improvement. McCain points out that Maple Leaf Foods had years of leadership in environmental initiatives before going further to address social challenges by committing to their ambitious sustainability goals (including being a leading sustainable protein company).

“We were already leaders in raising animals without antibiotics. We already had some of the leading-edge animal welfare practices in the world,” he says.

This foundation allowed the company to build on its achievements and continually strive for better performance.

Businesses must recognize that ESG is not a one-time effort but a continuous process of assessment, improvement, and adaptation to new challenges and opportunities.

Continuous improvement involves regularly reviewing and updating ESG strategies to reflect new insights, technologies, and stakeholder expectations. It requires a commitment to learning and innovation, as well as the flexibility to adapt to changing circumstances.

Businesses should establish processes for monitoring progress, gathering feedback, and making necessary adjustments.

This proactive approach helps to ensure that ESG strategies remain relevant and effective over time.

By adopting this focus, McCain notes, businesses can not only build greater stakeholder trust but also drive long-term value. And in an era where sustainability is becoming increasingly critical, businesses that prioritize impactful ESG strategies will be better positioned for success in the future.

“We [have chosen to] be part of the solution… [the company’s] belief system [and strategy have always aligned] with that.”

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