Individuals, risk and capital are the essential links that connect all dimensions of ESG and sustainability. Individuals, for example, are on the heart of local weather and resilience, wellbeing, diversity, equity and inclusion (DEI), and sustainability. Those that may have interaction their people in advancing their DEI and local weather goals, while supporting employee wellbeing and resilience are more profitable than companies that don’t. Risk administration captures and measures how ESG pervades a corporation’s operations as well as its potential costs of action and inaction. And capital not only encompasses sustainable investing, but additionally investment in programs – whether to help staff and communities or to mitigate risk.
A corporation that meets ESG commitments starts by understanding how people, risk and capital have an effect on every of its stakeholder groups. For example, they know their staff will look to them to not only support and put money into their wellbeing and Total Rewards – fair pay, versatile work arrangements, health and benefits programs, to name just a few – but in addition to demonstrate organizational commitment to the core tenets of ESG: protecting the environment, enhancing social impact and diversity and inclusion, investing responsibly and ensuring efficient corporate governance.
Environmental, social and governance defined
Organizations at the forefront of ESG respect that their investors, who acknowledge the significance of attracting top expertise, will help these with the processes, talent and technology to run capital efficient businesses as well as give attention to social and environmental issues. They also see the need to manage the short-term risks related with climate change – more severe weather, increased provide-chain risks as a result of more frequent and intense natural catastrophes as well as their carbon footprints and, in some industries, the lengthy-term sustainability of their enterprise models.
And while environmental and local weather exposures are typically the primary risks that come to mind in terms of ESG, risk administration extends into the social and governance categories as well. Essentially, effective risk administration – and its impact on people and capital – is also part of fine ESG management. Similarly, sustainable investment transcends ESG categories while additionally incorporating dimensions of individuals, risk and capital.
Without a multifaceted yet integrated approach to ESG, organizations are likely to fall in need of their commitments and face consequences on numerous fronts: shareholder value, ability to draw and retain top talent, and lack of brand equity, among others.
Whether creating a holistic, enterprise-level strategy, executing tactical ESG-associated programs, or helping to connect sustainability goals with day by day efforts, we help clients address ESG as a fundamental want throughout their organizations’ numerous individuals, risk and capital strategies, with complementary services and options that foster operational excellence and lengthy-term organizational sustainability.