ESG Under Scrutiny
Organizations across the globe are facing increasing scrutiny around ESG-related issues. It’s a shift driven by several external pressures, including mounting recognition that the world is in a climate emergency, employees demanding better workplace conditions, a desire for more transparent supply chains, new regulatory disclosures in specific regions and more.
While stakeholders expect organizations to have mature ESG strategies, many businesses are still in a process of education and evolution — trying to make sense of what ESG means to them and understand how their business impacts people and the environment.
While grappling with the expectations of shareholders, insurers, regulators, employees, communities and consumers, organizations are also trying to keep pace with a complex and fragmented landscape that is not yet standardized. With regulatory and financial frameworks for measuring ESG across industries either shifting or emergent, businesses are having to navigate the continual evolution and proliferation of ESG terminology and definitions. This makes it challenging for organizations to effectively capture ESG data and measure impact through a lens of sustainability.
Despite the difficulties these challenges pose, a failure to invest time, energy and resources into ESG compliance and standards exposes organizations to increased risk. From investment ratings and access to capital to employee turnover and future value — ESG issues can pose broad and complex risks to businesses, insurance companies and investors that must be addressed.
This article explores how these challenges are explicitly impacting the food, agribusiness and beverage; life sciences; financial institutions; renewables; and private equity sectors. Looking at ESG through an industry lens can help organizations tackle broad and constantly evolving issues to develop a more targeted and effective ESG strategy.