ESG (environmental, social, and governance) criteria are part of a company’s operational requirements to attract socially concerned investors and to survive long-term. Investors and shareholders seek constant change, innovation, and adaptation, which warrants a steady ESG strategy and compliant business model.
GRC (Governance, risk, and compliance) is a risk management tool or framework to help organizations achieve ESG. It is important to carefully align the two. GRC management solutions can help identify environmental, social, and compliance risks that could adversely impact the organization.
If you are looking to get started with an ESG strategy, here’s what to look out for:
- Keep up with regulatory compliance
Choose which ESG regulations and standards you want to adhere to. For example, you could follow the UN Guiding Principles on business and human rights to prevent human rights violations. With a GRC provider, you can receive the best legal and regulatory content around the world, to assist you with which regulations to align with. You may also have access to location-specific content tailored for your business and receive alerts when legislation changes to always be on top of regulation updates.
- Engage with prioritized stakeholders
Identify who your stakeholders are, how they directly affect your organization, or how they will be affected by operations. As a result, you will become responsive to stakeholder priorities to know what areas of concern to focus on for increased business performance. For example, you could get a wide variety of opinions from stakeholders on topics such as diversity and inclusion, environmental priorities, and compliance issues. Perhaps an investor stakeholder seeks reassurance that your product does not harm the environment. A GRC platform can alert you of potential environmental incidents, and keep you updated if you are compliant in this regard.
- Build the roadmap and framework
The ESG strategy should align with the company’s ambitions, goals, and milestones. All stakeholders will then work towards the same objective to make business goals and growth more achievable. Employees will also be more accountable for their work, and be committed to completing their tasks efficiently.
An effective GRC framework that ensures the ESG strategy is actioned correctly can provide reassurance to stakeholders. This is achieved through policy management, business continuity strategies to prepare for disruptions, incident management solutions, and more.
