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COSO and the World Business Council for Sustainable Development issued this COSO-ERM-aligned "Guidance for Applying Enterprise Risk Management (ERM) to Environmental, Social and Governance (ESG)-related Risks" - aimed at helping organizations of all types and sizes (and their decision-makers, risk management personnel and/or sustainability practitioners, in particular) clarify and manage ESG-related risks as part of their overall ERM approach.

At a high level, the Guidance reportedly provides: (i) approaches to overcome ESG-related risk challenges across the ERM process - including governance, risk identification & assessment, and communication and reporting; (ii) innovative responses to manage upsides & downsides of ESG-related risks; and (iii) methods for developing and maintaining a culture of continuous improvement for managing ESG-related risks.

The publication notes at the outset that the definition of "ESG-related risks" varies and may evolve over time based on each organization's facts & circumstances including, e.g., its business model, internal & external environment, mix of products & services, mission, vision, and core values. However, for purposes of the Guidance, "ESG-related risks" are defined with reference to issues identified by MSCI and Robeco as "prominent on investors' and other stakeholders' agendas" (see Table 1 on page 1 of the report). The Guidance notes that organizations like SASB and GRI also identify "potential issues that may be captured in the definition of ESG."

Notably, the report explains that since governance practices generally are well-developed and - for the most part - well-managed, the Guidance focuses primarily on E&S issues; governance risks are addressed largely in the context of E&S governance or issues that have more recently garnered heightened investor scrutiny, such as board diversity and business ethics.