Regardless of the company's present stance on the ESG movement per se, for those companies that are still not sure how to react, Deloitte's "Sustainability: Audit Committees Face Front Line Risks" (courtesy of the Risk & Compliance Journal - WSJ) poses some good questions boards and management should consider to generate thoughtful discussion internally about corporate sustainability in a way that makes sense for the company and should position the company to be responsive to growing investor interest in this area:
- What is the current landscape of external market ESG evaluators (raters, rankers and analysts) and the company’s ESG profile?
- What is the internal governance structure around ESG in the company, including roles, responsibilities, data management, control environmental, reporting and disclosure?
- What opportunities can be identified to drive more value through existing ESG practices that are already in place?
- Are ESG issues being considered in isolation as concerns arise, or proactively with a view through an enterprise risk lens of the full range of issues that could be important for the organization and investors?
- Is there a way to be more intentional, yet also more efficient, in how the organization views its ESG opportunities, dependencies, and related disclosure objectives?
Importantly, the focus on ESG-related risks and opportunities, and addressing matters proactively and in context of a larger picture, likely mirrors the company's planned approach to a multitude of other factors and developments that may impact the company's business operations or prospects.
For those companies considering voluntary ESG-related disclosure, the article also notes the reporting discipline that can be attained by third-party assurance, and the benefits that may be attained from consulting widely referenced ESG standards and frameworks (e.g., risk identification and evaluation) - even if the company does not wish to adhere to any particular standards or framework for any other purpose.
Access additional information & resources on our Sustainability page. This post first appeared in the weekly Society Alert!