2.1 Understand ESG Policies and Processes

Why This Step Matters

Once you’ve identified which topics are material (in Step 1), the next question is:
How does your organisation manage each of these topics?

This is where policies and processes come in. For each material topic, Klappir‑Strategy helps you document how your organisation defines expectations, assigns responsibility, and takes action.

What Are ESG Policies?

A policy is a formal or informal statement of intent that guides how your organisation approaches a specific sustainability matter.

Policies typically include:

A commitment or principle (e.g. reduce emissions, ensure safety, prevent discrimination)
Who is responsible
The intended scope of the policy

Example
“We are committed to reducing Scope 1 and 2 emissions by 30% by 2030 through energy efficiency upgrades and staff engagement.”

What Are Processes?

A process describes how the policy is implemented in practice. It turns intentions into action.

Processes might include:

Internal procedures or workflows
Risk assessments and due diligence
Monitoring, audits, or training
Supplier controls or screening tools

Example
“All suppliers must complete an environmental risk self-assessment before onboarding.”

What the Standards Say

ESRS (Draft July 2025)

For each material topic, companies must disclose:

Whether they have a policy to manage the matter (ESRS 2 GOV‑1)
How the policy is implemented in practice (ESRS 2 GOV‑2)
How the policy is monitored and reviewed (ESRS 2 GOV‑3)
Related actions, resources, and results (topical standards, e.g. E1‑1, S1‑1, G1‑1)

If no policy exists for a material matter, the company must explain why and describe any plans to develop one.

VSME Standard

Organisations must report:

Whether they have practices, policies, or future initiatives for each applicable topic
Whether the policies include targets and who is accountable

Policies do not need to be formal documents but should show clear intent, structure, and accountability.

How Klappir‑Strategy Helps

In the Policies and Processes module, you can:

Upload existing policies or describe informal practices
Document how the topic is managed (governance, actions, monitoring)
Tag each entry to the relevant material topic
Identify gaps or areas for improvement

This creates a clear, auditable link between your materiality results and your sustainability management approach.

What to Include

For each material topic, document:

Field	What to Include
Policy description	The organisation’s commitment and intent
Process or implementation	How the topic is managed operationally
Monitoring or review	How effectiveness is tracked (if applicable)
Future initiatives	Planned improvements or updates
Accountability	Who is responsible (role or function)

You can also link or upload relevant documents, e.g. codes of conduct, ESG strategy, supplier requirements.

Where This Leads

This step lays the foundation for:

Objectives and Actions (Step 4)
Targets (Step 5)
Reporting (Step 7)

You’re building a clear chain from Materiality → Policy → Action → Reporting.

Outcome of Step 2.1

You now understand:

What ESG policies and processes are
How they relate to each material topic
What ESRS and VSME require in terms of disclosure
How Klappir‑Strategy helps you document and manage these effectively

Only material topics need policies. If a topic is material but lacks a policy, you can document that and explain plans to address the gap.

Go to the next step:

2.2 How to use the Policy and Processes module in Klappir-Strategy