Spring is in full swing according to the astronomical calendar, and even though it may not always feel like it is here in the UK, Clausematch recently held a Spring Festival in honour of Earth Day focused on ESG Compliance.
As part of the festival, one of the events held was a Women in ESG Compliance panel session with leading experts, Lisa Beth Lentini Walker, Assistant General Counsel at Marqeta, Sarah Sinclair, Co-Founder at Change Gap and Irina Velkova, Director at Grant Thornton UK, to discuss how compliance teams can successfully navigate the changing ESG landscape. In this blog, we will look at key takeaways from the event, but you can watch the full webcast here.
What are the benefits of implementing an ESG strategy?
Now more than ever, companies are being held to higher standards. “Recent studies show companies that are more ethical, have clearly defined priorities and take the time to invest beyond just running the business, end up performing better when it comes to investments and stakeholder buy-in,” explains Lisa Beth.
Companies that have a clear ESG strategy in place and thoroughly articulate how they are working towards meeting their objectives are at an advantage when it comes to retaining and attracting talent. Trends show that new entrants to the workplace (mainly the Gen Z population), now prioritise company values and commitments when it comes to accepting a job offer. It’s not all about the pay and benefits, they want to feel good about what they are doing, where they are working and this all links back to how the business they work for embraces its commitments to the planet and the people that their organisation interacts with. Irina also mentioned that organisations can expect to see “reputational gain, especially companies that are committed and serious about ESG”.
What should businesses be aware of when implementing an ESG strategy?
It’s important companies don’t become mechanical. Sarah Sinclair shares, “the worst thing companies can do is see ESG as a tick-box exercise. It is crucial companies get it right, as ESG affects everyone across the business, from investors to employees.”
It’s key for companies to find the time to assess not only the impact on their business, but also the impact their business has on all the different categories that are within ESG. Organisations often fail to see the big picture, as they find they haven’t left themselves enough time to analyse and understand their data and the gaps within their data.
Another key consideration for organisations is they need to be realistic about what they can achieve and how they can implement an ESG strategy into their company.
What three components should organisations include in their ESG Strategy?
Be focused on communications and values - Lisa Beth adds, “it’s important to explain the rules of ESG and design a strategy to not only meet the rules, but to communicate how and why the business is doing what it’s doing. This will help get buy-in and advocacy from people in a sustainable way.”
Have the right governance in place - This is key when it comes to supporting the introduction and implementation of an ESG strategy, as well as adopting the right tools, processes and frameworks. Organisations need to ensure ongoing monitoring to see how they are performing against their strategy and if targets are being met.
Be collaborative - “Be ESG about the way you do ESG”, says Sarah. Having access to external common and trusted sources of insights, data and capabilities from experts interpreting the laws, regulations and policies can be of great help when it comes to understanding ESG and learning new approaches.
How does technology play a role?
Finding the right solution in a crowded space of vendors and data providers offering ESG solutions can be overwhelming. Irina shared that she, “has seen lots of companies buying data just so they have something, without fully understanding what they need it for and if they actually need it”. Organisations should take a step back, do a proper scan of the marketplace and work out exactly what they want and need, including understanding their requirements and what they must report against. Doing this will save companies time and money, as it will avoid them buying something they don’t need or isn’t right for their business.
To uncover more of the key considerations organisations should keep in mind when it comes to building a thriving ESG Compliance strategy, watch the full webcast here.