An evolved approach towards ESG Risk and Value
Environment Social and Governance (ESG) has now become an important factor for Organizational Sustainability. Formulating a comprehensive policy where the Business’ long term goals are very well integrated with ESG issues is now a part of every Company’s culture and environment, which is looking for long term growth and value.
An ESG policy helps all stakeholders to believe in the Company and have a clear vision for its future. While some may think that factoring in ESG will cut into the Company’s profits, studies have shown that it is not the case. In fact, a well defined ESG Policy helps with the long term sustainability goals of an Organization.
When ESG performance is measured and managed accurately, Boards and C-suites become increasingly aware of the specific material ESG key performance indicators (KPIs). It can then be leveraged to boost corporate strategy, act on Business objectives and address short-term Risks as well as long-term opportunities. However, despite an increase in ESG disclosures in recent decades, evidence indicates that the issues reported in sustainability reports do not always align with the Risks reported in an Organization’s Risk disclosures. With the link between ESG factors and Risk becoming increasingly vital decision making factor for stakeholders, Companies must adopt an effective approach to bring Enterprise Risk Management and cross-department Leadership into the ESG conversation.
Only when Finance and Legal executives from varied departments and disciplines are involved in the ESG conversation, can there be an Organization-wide understanding of the Environmental, Social and Governance Risks and how these Risks can be identified, monitored and efficiently mitigated.
Some of the Key factors for efficient ESG Reporting
- Identifying Risks in real time and reporting them to the Board and C-Suite.
- Having the ability to respond quickly to high-value and high-impact Risks which can be detrimental to a Company’s reputation and brand
- Defining appropriate Controls for creating a and long-term ESG plan.
- Effectively mapping and integrating ERM with ESG.
- Centralized Business data gathered from different sources
Additionally, monitoring the ESG policies should be continuing and agile and to respond to the dynamically changing Business environment. This is where Big Data and Artificial Intelligence come into play.
About Confident Governance
Using automation and Artificial Intelligence, the Governance as a Service® Platform, brought to you by Confident Governance helps in understanding, responding in real-time and mitigating risks before they become full-blown disasters that damage a company’s reputation and brand.
Visit us at our #AppExchange listing today at https://cglabs.us/cg_products and get confident with your Governance initiatives.