Environmental, Social, and Corporate Governance (ESG) refers to a set of responsibility metrics that investors review in the decision-making process when considering new investments, but they also provide a gauge for businesses to benchmark on best practices. As a compliant business, Pace® is committed to creating a positive outcome for all of its people, the environment, and the future.
Pace® Vice President and Chief Compliance Officer Judy Morgan has a wealth of knowledge on ESG and what it means to make a positive impact on the working and natural environment. Here is a recent conversation we had with her about Pace® and its commitment to ESG.
Living Up to E, S and G
Confusing as it may be, there are no formal standards for ESG. Instead, there are a compilation of high-profile issues in each category that have been identified by companies, investment groups and other organizations, as well as the government.
“The environmental standards are the easiest to explain but are the most complex,” Morgan said. “We are ahead of the overall industry and have led the way in multiple innovations. This includes reducing toxic chemicals by scaling down sample volume and subsequently the volume of these chemicals used to process the samples through new technologies and techniques.”
Additionally, Pace® is implementing programs for resource reduction, such as a fume hood program requiring the sash to be shut in order to save energy. Other practices include recycling and waste management programs with disposal options such as waste-to-energy and combustion of trash.
Social responsibility covers Pace® people, staff, community, labs, and suppliers. Pace® has policies and programs around fair labor practices, Equal Opportunity Employment Commission (EEOC), affirmative action, and the Americans with Disabilities Act (ADA).
“Our main focus is respect in the workplace; for one another and in support of professionalism,” Morgan said. “We engage with our local communities and support organizations that represent education, health care and social development. We also pass our internal expectations directly to suppliers and expect that their practices, ethics, fair trade, and overall responsibility reflects ours.”
Corporate governance is about transparency through and through. Pace® will release its first ESG performance report at the end of Q3 in 2024; its first step towards visibility and sharing performance.
“We have a strong commitment to ethics and it’s an area where we absolutely excel. We are very proud of that. It verifies who we are,” Morgan said. “Strong governance is essential, and we achieve it through transparent leadership, accountability and strong ethical behaviors and beliefs at all levels.”
What this all means for Pace® is that it has established a set of baselines and is looking at reasonable ways to achieve a positive impact. These are meaningful actions in each category placed on a reasonable timeline and prioritized appropriately.
Addressing Our Biggest Challenges
Every business experiences challenges, and Pace® is no exception.
Staff retention is a challenge that plagues environmental organizations and is compounded by increased pressure for quicker results and higher quality output. Less long-term staff creates experience and knowledge gaps which cause process deficiencies.
“You have to have consistency in the things that you do, and this is one of the biggest areas that I am working to address,” Morgan stated.
Aside from employment challenges, the regulatory landscape is shifting its focus toward eliminating toxic chemicals such as the primary extract solvent – methylene chloride – used for EPA organic methods. However, regulatory requirements slow this process.
“This is one of the largest barriers. It makes it so difficult to justify the monetary investment since the amount of time to realize a financial return cannot be accurately predicted,” Morgan said.
If Pace® had one wish, it would be to automate manual processes within the industry in order to improve time and resource management.
“We are hoping that the industry can collectively find solutions to help ease some of the strain from the challenges we are facing now and will continue to face for years to come,” Morgan said.
Why ESG?
Sometimes it can be easy to lose sight of why we do the things we do. Our highly visible Pace® Analytical Services Division offers -services that are grounded in environmental compliance testing for others; therefore, it makes sense to focus on the environmental component of ESG.
However, Pace® also wants to provide the best business environment possible in order to attract and retain long-term staff.
“To further our understanding, Pace® hired a consulting group to perform a materiality assessment to identify the areas that are most important to our staff overall,” Morgan explains. “The assessment included Pace® staff at all levels and several key customers.”
In addition, Pace® does business with several publicly traded companies and federal agencies. Therefore, Pace® is constantly asked about its activities, and the company has used these requests to help guide priorities.
Pace® has strong relationships with agencies such as EPA and routinely collaborates with industry organizations to provide services from method development, validation, and implementation, to monitoring for regulatory compliance.
“I find it beneficial to participate in congressional visits annually in Washington, D.C. and work throughout the year to keep up to date on government affairs such as legislative actions that impact our business,” Morgan said. “This allows for firsthand knowledge and recently afforded me the opportunity to speak before a congressional committee on water contamination and testing.”
Pace® has participated in both legislative support and legislative opposition at the federal and state levels over the past several years. In many cases, Pace® has worked directly with individuals in Congress who sponsor bills in areas that impact the company.
“These actions take patience,” Morgan said. “Their results are not immediate or obvious, but we find with consistent communication, in-person visits and education, we have built expert credibility and a voice that makes an impact on the direction of the future.”
To ensure Pace® stays on track with its ESG goals, the company reports key activities into a number of scorecard services including one called EcoVadis, which grades Pace® on how well it meets requirements. Pace® will continue to use these services to set future goals.
“This is our future. We want to engage with staff at all levels. Our environment is where everyone can help and has the power to make a difference,” Morgan notes. “We have many projects underway, but every day everyone can find a way to conserve and preserve.”
Pace® is proud to meet or exceed state and federal laws governing waste management and actively works to minimize our environmental footprint wherever possible while remaining dedicated to cultivating a transparent, diverse, and inclusive community. “We still have much more to do, but I look forward to finding ways to engage our entire staff in some part of the journey to a more sustainable future,” Morgan concludes.