Alexandra Parrish presents on ESG risk management
Alexandra Parrish from Achieving Greenness joined us at our Risk Workshop on 22nd May and presented on ESG Risk Management.
Please see the recording of the session below:
What is ESG?
There are 3 risk buckets – E, S and G, Environmental, Social and Governance. Environmental is concerned about our impact on the planet. Social is the more people orientated part, human rights, supply change, wellbeing and development. Governance is everything else, what are the rules? Some risks might fit across multiple buckets. Data protection for example could be placed in the G bucket or the social bucket as you are looking after people’s data.
Align your ESG goals with your organisation’s values
What is your organisation most concerned about? Some organisations may be most concerned with the S bucket and wish to give back to society and ensure you are a great organisation to work for. Whatever area you choose, that aligns best with your values is a great opportunity to differentiate your organisation.
ESG opportunities
You have the opportunity to be market leading in some of these areas which will attract more clients, attract employees, improve your reputation, costs can be reduced, revenue can increase, risk can be reduced if you start thinking about ESG in an open way. People are willing to pay a premium for organisations that are ethically sound.
How ESG risk management can save your organisation money
ESG can help organisations save money too. By choosing to be more environmentally friendly and not printing anymore you don’t have the paper costs, printer maintenance costs, ink costs and it will improve your reputation with clients, suppliers and employees as they know you are looking out for the planet. This is just one way you can save money using your ESG strategy.
ESG risks on risk register
Your ESG risks should be a principle risk on your risk register and they should be given a RAG rating too. What impacts you in the E, S, and G buckets? As with risk management generally, you need someone within management to be on board with ESG risks.
Identify, assess, manage and mitigate these ESG risks in the same way you would deal with other principle risks. Managing these risks will have a positive impact financially on organisations.
Action vs Talk
It is important to think about how you are going to deliver these goals. Saying you will be net zero by 2050 is not enough. You need a plan on how you will get there with incremental goals that will help you achieve the larger end goal. Greenwashing is saying or doing something to give the impression you are greener than you are. If you are found out to be greenwashing this will be damaging to your brand.
No-one is perfect and everyone has to start from somewhere. Knowing you have to improve is part of the journey. Measuring where you are now is important so you know what your baseline is and then you can measure and know that you have achieved your goals. There are many companies that can help you understand where you are now and can help your roadmap with where you want to be in 1, 2, 5 and 10 years time.
Investment
This does not have to be financial investment. Time and energy are the key elements required to make changes within ESG to help benefit your organisation. ESG adoption will help with your employee attraction, retention and your organisation reputation and resilience.
Please click here to watch Paul Dudley’s session from our risk workshop on risk bow ties.
