ESG – Environmental, Social, and Governance – has been creating a barrage of pressure upon organizations across industries and around the world in recent years. Corporate investors are making capital investment decisions in companies based on ESG commitments, metrics, and ratings. Legislatures and regulators around the world are ensuring the regulations are focused on the breadth of ESG as well as specific aspects of ESG (e.g., modern slavery, carbon emissions). Employees are making decisions on who they work for based on shared values and not just benefits. Customers are engaging and buying products and services that share their values. ESG is getting attention from the top of the organization, the board and the executives, to the down into the depths of the organization.
What is ESG and Why is it Important?
That is a good question. ESG varies in breadth and depth of scope by industry, company size, and even geography and regulatory frameworks. It also varies by individual departments that focus on aspects of ESG but not the breadth of ESG. Too often, ESG can be like the parable of the blind men and the elephant where one feels the side and thinks it is a wall, another feels the trunk and thinks it is a tree, and another the tail and thinks it is a rope.
In understanding the important scope of ESG, consider . . .
[THE REST OF THIS ARTICLE CAN BE FOUND ON THE KANINI BLOG WHERE GRC 20/20’S MICHAEL RASMUSSEN IS A GUEST AUTHOR]