ESG-Powered Growth

The past 12 months have seen big changes at Canada’s largest privately owned translation company. NATIONS Translation Group’s new CEO, André Palaguine, has steered the Indigenous-owned business through an ownership change and a restructuring and rebranding exercise to become an end-to-end language and translation service provider.

And as a major part of this transformation, Palaguine has put environmental, social and governance (ESG) goals at the heart of the Ottawa-based company’s business strategy. NATIONS already had a number of ESG initiatives on the go. But Palaguine wanted to kick the company’s ESG efforts into high gear and make them a central focus.

“It’s very important for us as a business to contribute to society and the next generations,” Palaguine says. “We were doing ESG projects before, but we wanted to start thinking about ESG in a more structured way.”

Created ESG team and action plan

One of the first steps Palaguine put forth was to create an ESG team to help him coordinate efforts.

Together they developed an ESG policy and an action plan that included a timeline, milestones to monitor progress and list of who was responsible for each project. Then everyone got to work implementing the plan.

One of the main initiatives is to promote economic opportunities for Canada’s Indigenous communities. This includes prioritizing contracting with Indigenous vendors and building an inclusive and diverse team. NATIONS also supports Indigenous organizations with sponsorships and donations, particularly those involving youth.

Another major area of focus is the environment. The company is pursuing a zero-waste strategy—ensuring no waste goes to landfills—and has transitioned to a paperless office, which the company estimates saves 109 trees per year. NATIONS is also reducing its carbon footprint by transitioning to renewable energy through a partnership with wind-power provider Bullfrog Power.

The business has further cut its greenhouse gas emissions by switching from using backup generators to more energy-efficient backup batteries. NATIONS has also invested heavily in AI and translation-automation technology that have improved productivity, resulting in additional potential emissions reductions through greater operational efficiency.

Finally, Palaguine ensured that the company’s ESG focus is front and centre on the company’s redesigned website and marketing material. “We want to show community leadership and encourage other organizations to do the same,” he says.

All of the efforts have had a huge impact on the business. The marketplace has taken strong notice, with new customers frequently mentioning ESG as a key reason for wanting to work with NATIONS.

Part of the explanation may be that ESG criteria are becoming increasingly important in supplier selection for large organizations. A 2023 BDC report found that 82% of large buyers in the public and private sectors require their suppliers to meet at least one ESG criterion. This proportion is expected to reach 92% in 2024.

Initiatives contributed to 25% jump in sales

“Potential clients mention it when they approach us,” Palaguine says. “We attract a lot of customers that want to work with us as a strategic ESG partner. The appetite has really grown to do business with us. ESG has opened a lot of doors.”

Sales in the past 12 months have shot up 25%, thanks in no small part to ESG, Palaguine says. He cites a large contract with a manufacturing company that was seeking an Indigenous-owned supplier with a solid ESG program. NATIONS also won a prestigious contract to translate the address of a prominent international figure visiting Canada into 34 Indigenous languages.

“There is a lot more awareness and appetite for ESG among clients,” Palaguine says. “It’s important for every company to ensure it is ESG-compliant.”

This is consistent with BDC’s report, which found that 50% of supplier SMEs said seizing new business opportunities was an advantage of meeting ESG requirements.

Improved margins and 12% reduction in costs

Another benefit: lower costs and improved margins. The various ESG initiatives have contributed to a 12% reduction in the company’s costs, Palaguine says.

The ESG focus wasn’t without challenges. Going paperless meant changing processes without losing information or disrupting work. To switch to backup batteries, Palaguine created a risk management committee and worked closely with his team on the transition. Improving vendor diversity involved a process to vet new vendors.

To smooth these changes, Palaguine says he prioritized good communication and change management to discuss projects, ensure buy-in and make any needed course corrections. Business unit heads responsible for projects monitored progress and work out how to move forward. “It’s important to make sure all stakeholders are on board,” he says.

Improved customer and employee relationships

Focusing on ESG has been such an unvarnished success for NATIONS that the company’s partners have taken notice—and are asking for advice on how to proceed with their own efforts. That’s even led to a new business line of offering consultation services on how to plan and implement ESG. “They want to know how we achieved this,” Palaguine says.

Overall, he says, ESG has invigorated the company, made it stronger, and allowed it to give back and contribute to a better world. “ESG has helped us developed stronger, better relationships with customers. Our employees are more engaged. And diversifying vendors has opened new possibilities for business,” he says.

“Every company should be doing this. It’s a powerful business strategy, and we feel that it’s our responsibility to our community and planet.”

ESG in your business

Discover how ESG criteria are changing procurement practices and impacting suppliers in Canada in BDC study ESG in Your Business: The Edge you Need to Land Large Contracts

Article republished from the Business Development Bank of Canada