Creating OKRs Aligned with Your ESG Goals: a Step-by-Step Guide

The time has passed for businesses to focus solely on profit. Today, organizations are increasingly aware of their social and environmental responsibilities (Veenstra & Ellemers, 2020), a shift that is reshaping financial markets (MacNeil & Esser, 2022) and corporate strategy. To address this, companies are now establishing ESG (Environmental, Social, and Governance) goals that hold them accountable for their impact in these areas. However, given the ever-evolving nature of these issues, maintaining a responsible role is no small feat.

This is where setting structured goals becomes invaluable. Research on Goal-Setting Theory shows that well-defined goals can direct attention to key activities, energize teams, and foster resilience in reaching objectives (Kleingeld et al., 2011). Among the available frameworks, OKRs (Objectives and Key Results) are particularly effective for creating and measuring ESG goals, as they help align employee efforts toward measurable, impactful contributions (Niven & Lamorte, 2016).

In this article, we’ll explore how to use the OKRs to define, assess and improve your ESG goals over time. 

What Are ESG Goals and Why Are They Important for Organizations? 

Before exploring how to set ESG goals using OKRs, let’s first define what ESG means, and why organizations may benefit from embracing it.

Definition

Organizational ESG Goals are measurable objectives that address Environmental, Social, and Governance factors.

• Environmental goals focus on minimizing the organization’s ecological footprint. For example, a company might aim to reduce water consumption by 25% over three years.
• Social goals reflect how the organization engages with employees, suppliers, customers, and communities. Internally, a typical goal could be achieving gender pay parity within five years, while externally it could include contributing resources to local community projects.
• Governance goals cover company leadership, internal controls, and shareholder rights. A common objective here could be implementing annual ethics and compliance training for all employees.

Benefits

Setting ESG goals helps companies look beyond short-term profits, focusing on sustainable growth. This approach builds reputation by attracting clients, investors, and talent who value responsible business practices. A strong ESG reputation can thus directly impact stakeholder loyalty and public perception. (For further insights, see this PwC report on ESG and reputation).

Beyond reputation, financial performance is another key benefit. Studies indicate that effective ESG strategies often enhance overall financial outcomes, creating a win-win for profit and purpose (Li et al., 2021). Indeed, according to the Morningstar U.S. Sustainability Leaders Index, companies with high ESG ratings outperform companies with low ESG ratings by 38%!

Also read: Do Purpose-Driven Companies Outperform Traditional Ones?

Finally, ESG practices strengthen risk management. With investors increasingly focused on ESG resilience, companies committed to sustainable practices tend to better navigate market challenges and changing regulations (Koh et al., 2014).

From Aspirational Goals to Regulatory Compliance

In recent years, ESG efforts have evolved from voluntary initiatives to regulatory requirements, with organizations now facing mandatory standards from entities like the European Commission and the UN. While specific requirements vary by region, the trend is clear: ESG reporting is increasingly obligatory. In fact, the 2024 EY Global Integrity Report highlights that 37% of organizations find meeting these ESG regulations a significant challenge. Additionally, regulators are now urging companies to set ESG goals that prioritize global sustainability, going beyond just financial metrics (Delgado-Ceballos et al., 2023).

This is where OKRs (Objectives and Key Results) can provide real value. Unlike traditional goal-setting frameworks, OKRs focus on specific, measurable outcomes and encourage ambitious targets. By applying OKRs to ESG goals, organizations can transform broad sustainability aims into actionable, trackable steps. This approach not only supports compliance with evolving regulations but also aligns with long-term sustainability objectives, balancing immediate regulatory needs with broader, impactful changes.

Also read: How to Implement OKRs Into Your Organization and How to Use Them

How Can an Organization Create ESG-Aligned OKRs?

Here's a step-by-step guide to using OKRs to develop effective ESG goals:

1.     Identify Relevant ESG Priorities 

Your ESG goals should be aligned with your organization’s purpose and strategy, in order to focus efforts and resources on areas with the most impact. This strategic alignment helps ensure that your ESG goals complement broader company objectives.

So, how can you define your ESG priorities? Here are a few tips for you:

• Assess your organization's current impact on environmental, social and governance issues. Identify what you’re doing well, and what needs to be improved.
• Consider industry-specific ESG challenges and opportunities.
• Align with global standards like the UN Sustainable Development Goals (SDGs).

With these insights, you’ll be able to define ESG goals that fit your strategy and address key challenges. If prioritizing feels overwhelming, start with high-impact, low-cost actions that deliver visible value early on.

2.     Set Clear, Measurable Objectives

Objectives should provide a broad, qualitative goal that is aligned with your ESG priorities. Well-defined objectives make it easier to track progress, foster accountability, and engage employees. To craft effective objectives:

• Tailor objectives to your ESG priorities.
• Make them ambitious yet attainable.
• Ensure clarity to avoid misinterpretations.

Here’s an example of an objective for each ESG category:

• Environmental objective: Achieve a meaningful reduction in our environmental footprint.
• Social objective: Foster a more inclusive and equitable workplace.
• Governance objective: Enhance transparency and accountability across the organization.

3.     Define Key Results 

Each objective should be broken down into key results that provide concrete targets and keep motivation high. To define key results:

• Establish quantifiable metrics to track progress, so that motivation remains high during the process. 
• Ensure those metrics are specific, time-bound, ambitious, measurable and aligned with reporting periods.

Now, let’s see which key results we can set to achieve the objectives from the previous step: 

• Environmental objective
  • Key result 1: Reduce carbon emissions by 30% by the end of 2024.
  • Key result 2: Increase renewable energy use by 60% within a year.
• Social objective
  • Key result 1: Increase diversity in leadership positions by 40% by the end of the year.
  • Key result 2: Implement mentorship programs reaching 75% of underrepresented employees by the end of next year.‍
• Governance objective
  
  • Key result 1: Achieve 100% employee completion of ethics training by Q2.
  • Key result 2: Publish quarterly ESG performance reports starting next quarter.

4.     Integrate Across Departments 

The more members of the organization are involved, the more chances you have of achieving your ESG goals. Engaging people from different teams offers a brand range of perspectives, and helps bring fresh, creative solutions to the table.

• Involve various departments in the creation of your ESG OKRs to ensure each team connects their work with the company’s sustainability goals.
• Align everyone, from leadership to individual contributors, to foster support and commitment.

5.     Balance Short-Term and Long-Term Goals

The key is not to focus on one kind of goal, but to integrate both short- and long-term ESG goals into your strategy. 

• Short-term goals offer quick wins that keep teams engaged.
• Long-term goals foster sustainability but may require sustained focus and commitment.

For example, you might aim to reduce carbon emissions significantly within a decade while setting annual milestones to show consistent progress.

6.     Assess and Adjust 

Setting good OKRs at the outset is crucial, however it doesn’t mean that these can’t be adjusted over time. Here’s how to keep your ESG goals on track through ongoing review and adjustment:

• Implement a structured tracking system: Regular OKR reviews are excellent tools for monitoring team progress on ESG goals. To make the most of these sessions, establish a regular schedule (e.g., weekly or monthly), set clear agendas in advance, and outline key discussion points. This structure helps participants come prepared, ensures productive conversations, and maximizes each review’s impact.
• Be prepared to adjust OKRs based on fresh insights or shifting organizational needs
• Consider pursuing external ESG certifications to maintain momentum and demonstrate progress.

Using Holaspirit for Creating and Tracking ESG OKRs

Holaspirit can support every stage of your ESG OKR journey—from creation to tracking and real-time progress updates. Here’s how to leverage our platform to set, connect, and measure your ESG objectives effectively.

• Set clear objectives and key results: Holaspirit’s OKR feature enables you to set ESG objectives with measurable key results at all levels (organization, team, and individual), promoting clarity and accountability across teams.
• Conduct regular reviews: Use Holaspirit’s Meetings feature to conduct structured OKR reviews, with a clear agenda. This is a great way to discuss potential roadblocks, adjust objectives when needed, and ensure teams are on track to achieve objectives as planned.
• Monitor progress asynchronously: Teams can update OKR progress in real-time without needing to hold a meeting, allowing everyone to stay informed on the latest status.
• Link your projects to your OKRs: With Holaspirit, you can connect specific projects and tasks to the OKRs they support. This helps teams visualize the purpose and impact of their work, fostering a stronger sense of responsibility.

To conclude

Setting and tracking ESG goals with OKRs is an effective way to drive progress on environmental, social, and governance objectives. By setting clear priorities, defining measurable objectives and key results, involving teams across departments, and conducting regular reviews, your organization can achieve lasting, impactful change with accountability at every level.

However, you need the right tools to get there. Holaspirit is an ideal partner for this journey, offering more than just OKR tracking. It also includes features for documenting roles, structuring meetings, and managing projects, helping everyone understand their responsibilities and engage meaningfully with the company’s objectives. With Holaspirit, you’re well on your way to enhancing transparency, alignment, engagement, and performance across your organization.

Ready to see how Holaspirit can support your ESG initiatives? Schedule a demo with us today!

References

Chelawat, H. & Trivedi, I. (2016). The business value of ESG performance: the Indian context. Asian Journal of Business Ethics,5, 195–210. 

Delgado-Ceballos, J.; Ortiz-De-Mandojana, N.; Antolín-López, R. & Montiel, I. (2023). Connecting the Sustainable Development Goals to firm-level sustainability and ESG factors: The need for double materiality. BRQ Business Research Quarterly, 26(1), 2-10.

Kleingeld, P.A.; van Mierlo, H.H.; Arends, L.L. The effect of goal setting on group performance: A meta-analysis. Journal of Applied Psychology, 96, 1289–1304. 

MacNeil I., Esser I. M. (2022). From a financial to an entity model of ESG. European Business Organization Law Review, 23(1), 9–45.

Niven, P. & Lamorte, B. (2016). Objectives and key results: Driving focus, alignment, and engagement with OKRs. John Wiley & Sons.

Veenstra E.M & Ellemers N. (2020). ESG Indicators as Organizational Performance Goals: Do Rating Agencies Encourage a Holistic Approach? Sustainability, 12(24), 10228