ESG Starts with Well Written and Enforced Policies

ESG (Environmental, Social & Governance) has been taking the world by storm as of late, and there has been increased pressure from regulators recently to implement ESG reporting in their organizations. Organizations across industries have been developing ESG strategies as a result of the increased demand and pressure from stakeholder groups, investors, employees, clients, and regulators.

Developing an effective ESG strategy, however, starts with defining what is expected in each of the components of ESG – environmental, social, and governance. Far too often organizations seem to focus on only one aspect of ESG, such as environmental, but organization need to define expectations for each component within their policies. This starts with your organizations Code of Conduct, and then filters down into the individual policy areas for ESG.

The Policy Management Capability Model is an Effective Guide to helping you define, manage, and enforce your ESG related policies. The Policy Management Capability Model allows the organizations to:

o Govern ESG by establishing policy governance and management teams and developing a with standardized forms and processes.

o Develop and establish standard methods for ESG policy development to apply whether creating new policies, revising existing ones for broader application, making changes in response to change in the external or internal environment, and retiring out of date policies.

o Communicate and engage employees based on ESG risk exposure and provide ongoing communication and training for each ESG policy or category of policy, taking advantage of enabling services with skilled personnel and tools relevant to the design, delivery, attestation, and measurement of outcomes.

o Enforce and monitor ESG policies with stablished tasks, methods, and processes for implementation, exceptions, enforcement, and assurance of policies.

o Improve ESG policies through methods to periodically review and improve policies, retire policies, and to evaluate the design, effectiveness, and operation of the policy management capability.

Modern organizations are no longer defined by a brick-and-mortar business structure and traditional employees, and ESG often defies and crosses these traditional business boundaries. In today’s modern and dynamic business environment, organizations are a web of third-party relationships, and organizations need to actively manage and monitor these relationships with a proper policy management strategy to ensure integrity, efficiency, and agility throughout the extended enterprise.


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