Environmental, Social, and Governance ( ESG )

An organization’s customers and team members  increasingly demand that ownership and management adopt more socially conscious practices: to reduce their carbon footprint, to be conscious of their brand reputation, to retain the best talent and to develop a more inclusive  approach to governance.

With the increasing role of stakeholder capitalism across all industries, many organizations feel pressure to report on non-financial metrics and the value they create beyond financial profit. However, in this complex and often subjective discipline, the correlation between ESG performance and financial performance isn’t always clear. This is a significant undertaking for businesses, not the least of which is because ESG as an initiative is actually a confluence of business topics and initiatives all pulling together under the rubric of sustainability. 

ESG risks permeate a business in different ways. It’s more than a line on the balance sheet, but rather a strategic, cultural and operational mindset that needs to be embedded across the entire organization. For this reason, there must be a clearly defined ESG risk strategy and corresponding governance. Climate risk is the most material across the ESG spectrum in terms of impact and investor interest. One of the biggest challenges is the overall integration of ESG risks and strategies so individual business units are not working in silos, allowing ESG risk strategy to weaken and lose focus.

And for those private enterprises – independent restaurants, hotels retail outlets – these evolving concerns must be addressed by an approach tailored to scale.

Not political. Practical. Where does the most sought-after talent choose to work? And your customers are free to vote with both they wallet and their feet. Turn these efforts into your business’s competitive advantage.