The Inter-Relationship Between ESG And ERM

In the wake of the coronavirus pandemic and the growing global urgency around climate change, organisations worldwide are being forced to place an even greater focus on their ESG and ESG risk management practises. Historically, corporate social responsibility (CSR) was the initiative frequently championed by activist employees and consumers, whereby issues such as carbon footprints and ethical supply chains were scrutinised.

Yet for most organisations, this wasn't considered a core business objective, nor was it officially regulated. Fast forward to today and ESG is now the hot topic in boardrooms, whilst becoming an increasing requirement for investors, employees, regulators and customers alike.

As perceptions have changed over time, these stakeholders have come to realise that environmental, social and governance issues are critical to a business's reputation and financial performance. Today's shareholders want to know more than just what you can earn for them, they also want to know how you earn it.

Your organisation is expected to actively promote and embody the values that underlie ESG, and not just for sustainable investors. Even if you don't have shareholders that care about ESG, you can bet that many of your valued customers and staff members do.

Given this new reality, how can your organisation best roll out and maintain an effective ESG program, so that ESG becomes a natural part of your daily operations and not simply just a shareholder marketing program or a compliance activity?

One fast, easy, and proven approach is to integrate ESG into your organisation's Enterprise Risk Management (ERM) program. We explore what this means for business professionals , and the benefits of organisations prioritising their ESG risks to improve their sustainability in the long-term.