Environmental, Social and Governance (ESG) factors refer to important measurements of an organisation that are not captured by traditional financial measures. In the same way, Corporate Social Responsibility seeks to expand organisational values to include environmental and social factors, ESG includes criteria that measure how effectively a company manages itself, its impacts on nature and its relationship to its community.
Once seen as optional for a company’s published values, ESG factors are now considered material to the bottom line.
ESG has grown from a niche focus of investors to rapidly become a required disclosure for publicly traded companies around the world. ESG measures are a response to markets and regulators shifting to account for environmental risks, social pressures and well-organised governance structures. The impacts of climate change bring physical and transitional risks. Social awareness of diversity, equality and inclusivity apply higher standards across supply chains. Good governance requires transparency of legal compliance, executive pay, leadership accountability and stakeholder rights.
“ I urge companies to move quickly to issue them (Sustainability Disclosures) rather than waiting for regulators to impose them...No issue ranks higher than climate change on our clients’ lists of priorities, They ask us about it nearly every day.” - Larry Fink
EarthCheck’s experience means you can expect guidance to simplify the process of determining what ESG factors are material to your business. With the expansion of assessment criteria to include non-financial measures, so too does the standard for materiality grow. Not only is it important to know the impact of ESG risks on revenues, but also the impact of organisations on sustainability.
EarthCheck has the advanced understanding to guide your organisation through the process of identifying, measuring, managing and reporting the ESG factors of your company. This understanding has allowed EarthCheck to distill the opaque web of ESG standards to the most forthright approach.
- EarthCheck can help you identify what ESG factors are material to your company and its shareholders. This is an application of risk assessment to determine what ESG factors impact revenues, the environment and external stakeholders. The results of this materiality test will be organized by the corresponding pillars of ESG: Governance, Planet, People and Prosperity.
- EarthCheck will provide training to build capacity within your organisation to understand, measure and manage these ESG factors. It is critical to have top-down support for a significant approach change as well as buy-in from staff at every level to implement the day-to-day management.
- EarthCheck will produce the appropriate reporting documentation to communicate your organisation’s ESG commitment. EarthCheck provides third-party verification of your current state, and with an eye to the future, can help set aggressive and achievable targets for improvement.