ESG is not just “going green” – it’s vital to your business strategy

ESG strategy encompasses more than reporting on DE&I statistics or setting a carbon goal.

You’ve likely taken some steps to make your business more sustainable – implementing recycling, reducing greenhouse gas emissions, or introducing employee wellness initiatives, for example. You might also feel pressure from investors, employees, and customers to place greater emphasis on environmental, social, and governance (ESG) strategy. But what does that mean for your business?

When it comes to ESG strategy, your customers, your investors, and your business partners expect you to do something – but that doesn’t mean you have to do everything.

ESG strategy helps responsibly fulfill your business’s purpose

Looking through the ESG lens provides a more holistic view of your company.

ESG strategy deals with how environmental, social, and governance issues affect your business’s strategies and practices – and ultimately, your company’s value. So, what does each area cover? Here’s a broad breakdown of ESG, and the topics each category includes.

Environmental 

How business operations impact the environment (and vice versa)

  • Waste and pollution
  • Resource use and depletion
  • Greenhouse gas emissions
  • Habitat destruction/preservation (or biodiversity)
  • Climate change adaptation/risk management
  • Product compliance & stewardship

Social

How an organization's operations affect its people and communities

  • Diversity, equity & inclusion
  • Human rights
  • Fair trade
  • Community investment
  • Workplace safety
  • Hiring practices
  • Consumer protection
  • Training and education

Governance (corporate)

How a company behaves and governs

  • Transparency, ethics, and integrity
  • Corporate reputation (corruption, fraud, regulation)
  • Stakeholder engagement
  • Internal system of controls, practices, and procedures
  • Privacy and data security
  • Executive compensation
  • Donations and political lobbying
  • Board diversity and structure
  • Supply chain resiliency

Practising Law Institute's

37th Annual SEC Reporting & FASB Forum

Join us in San Francisco on December 2-3, 2021 for PLI's annual forum, which focuses on the changing reporting landscape. Crowe ESG specialist Daniela Arias will discuss ESG and climate change disclosures, additional ESG regulations, and frameworks for ESG reporting.

Register today

ESG standards are changing quickly – and those changes could disrupt your business

It’s important to keep up with evolving standards – and depending on where you do business, you may deal with any combination of these standard setters (or others).

Maybe you’ve heard about the possibility of Securities and Exchange Commission (SEC) regulations on the horizon, or mentions of GRI and SASB standards – but who sets the standards, and how can they affect your business?

Global Reporting Initiative (GRI)

One of the most popular voluntary standard setters, GRI enables transparency and open disclosure about organizations’ impact to help create a more sustainable future.

Learn more

UN Global Compact

Largely focused on impact, the UN Global Compact is both a policy platform and a practical framework for companies that are committed to sustainability and responsible business practices. The Global Compact provides ten principles, which are supported in further detail by the UN Sustainable Development Goals (SDGs).

Learn more

UN Sustainable Development Goals (SDGs)

The UN SDGs are a set of 17 goals and macroeconomic targets that aim to promote sustainability, peace, and prosperity for people and the planet. The UN SDGs serve as the backbone of many sustainability and impact investing initiatives, such as the Principles for Responsible Investment (PRI) and the Global Impact Investing Network (GIIN).

Learn more

Global Reporting Initiative (GRI)

One of the most popular voluntary standard setters, GRI enables transparency and open disclosure about organizations’ impact to help create a more sustainable future.

Learn more

UN Global Compact

Largely focused on impact, the UN Global Compact is both a policy platform and a practical framework for companies that are committed to sustainability and responsible business practices. The Global Compact provides ten principles, which are supported in further detail by the UN Sustainable Development Goals (SDGs).

Learn more

UN Sustainable Development Goals (SDGs)

The UN SDGs are a set of 17 goals and macroeconomic targets that aim to promote sustainability, peace, and prosperity for people and the planet. The UN SDGs serve as the backbone of many sustainability and impact investing initiatives, such as the Principles for Responsible Investment (PRI) and the Global Impact Investing Network (GIIN).

Learn more

Task Force on Climate-Related Financial Disclosures (TCFD)

Developed and supported by prominent U.S. and global business leaders, the TCFD provides a principles-based framework that enables more effective disclosures over climate-related risks and metrics.

Learn more

Value Reporting Foundation (VRF)

The Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) have combined to form the VRF, which focuses on disclosure of sustainability-related topics that inform value creation, preservation, and erosion. The U.S.-based SASB provides a practical set of industry-specific disclosure standards and materiality framework, while the U.K.-based IIRC provides a principles-based framework to enable Integrated Reporting (<IR>).

Learn more

Other standard-setters

There are many other voluntary disclosure frameworks, regulations, standards, principles, or measurement criteria your company may need to be compliant with. Examples include the CDP, formerly known as the Carbon Disclosure Project; sustainable finance requirements set by the European Commission, such as the Sustainable Finance Disclosure Regulation (SFDR); EU Taxonomy; Corporate Sustainability Reporting Directive (CSRD); or specific country stock exchange listing requirements, such as those required by the Singapore stock exchange.

Task Force on Climate-Related Financial Disclosures (TCFD)

Developed and supported by prominent U.S. and global business leaders, the TCFD provides a principles-based framework that enables more effective disclosures over climate-related risks and metrics.

Learn more

Value Reporting Foundation (VRF)

The Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) have combined to form the VRF, which focuses on disclosure of sustainability-related topics that inform value creation, preservation, and erosion. The U.S.-based SASB provides a practical set of industry-specific disclosure standards and materiality framework, while the U.K.-based IIRC provides a principles-based framework to enable Integrated Reporting (<IR>).

Learn more

Other standard-setters

There are many other voluntary disclosure frameworks, regulations, standards, principles, or measurement criteria your company may need to be compliant with. Examples include the CDP, formerly known as the Carbon Disclosure Project; sustainable finance requirements set by the European Commission, such as the Sustainable Finance Disclosure Regulation (SFDR); EU Taxonomy; Corporate Sustainability Reporting Directive (CSRD); or specific country stock exchange listing requirements, such as those required by the Singapore stock exchange.

Your ESG strategy matters more to your customers and investors than you might think

Standards, customer expectations, investor concerns – there's a lot to consider as you develop an ESG strategy.

Implementing sustainable ESG strategies, policies, and practices is not only a vital way to care for our people and planet, but is also an increasingly important factor in how your customers and investors are making their decisions. From products to services, people want to do business with companies that are incorporating responsible environmental practices, social strategies, and governance policies.

Source Global Research, a U.K.-based research firm, conducted a study among U.S.-based senior executives and found that while sustainability might not seem like an immediate need, it’s quickly becoming important to all of your stakeholders. When asked what stakeholder-driven factors will drive sustainability investment in their organizations over the next five years, the top three were employee pressure (54%), consumer pressure (50%), and investor/shareholder pressure (37%).

Whether it’s assessing your supply chain for human trafficking or making a commitment toward responsible investment, customers and investors don’t just care where their money is going – they care where your money is going.

We can help you figure out how ESG strategy fits into your business plan – and your budget

Customers easily see through empty ESG initiatives – but you can make genuine and transparent changes in a practical, pragmatic way. Our team understands your specific industry needs and how they factor into an overall ESG strategy – here are just some of the areas where we can help.

ESG due diligence

If you’re looking to acquire a company, this focused assessment can help you locate red flags, risks, and opportunities related to governance, human resources, environmental practices, and more.

ESG strategy road map

If you’re not sure where to start your ESG journey, our road map can help you assess your current ESG strategy, identify gaps and opportunities, and plan for your future.

Road map execution and support

Once you’ve identified your ESG goals and priorities, we can help you get there. From human capital management to data privacy to supply chain management, we’ll help you move from the “what” to the “how” and get you connected to our specialized teams.

If you’re looking to acquire a company, this focused assessment can help you locate red flags, risks, and opportunities related to governance, human resources, environmental practices, and more.

If you’re not sure where to start your ESG journey, our road map can help you assess your current ESG strategy, identify gaps and opportunities, and plan for your future.

Once you’ve identified your ESG goals and priorities, we can help you get there. From human capital management to data privacy to supply chain management, we’ll help you move from the “what” to the “how” and get you connected to our specialized teams.

ESG education

From your board to your C-suite to your customers, our team can help you educate your company on ESG as a whole – and which parts of that whole best benefit your business.

Greenhouse gas (GHG) emissions accounting

Whether you’re preparing for potential SEC requirements, an M&A deal, or looking to step up your reporting, our team can help you evaluate and measure your GHG emissions.

Stakeholder engagement & materiality analysis

Our team can also help you engage with stakeholders and perform a materiality analysis to identify the issues that matter most to your stakeholders, including investors, customers, employees, and others.

From your board to your C-suite to your customers, our team can help you educate your company on ESG as a whole – and which parts of that whole best benefit your business.

Whether you’re preparing for potential SEC requirements, an M&A deal, or looking to step up your reporting, our team can help you evaluate and measure your GHG emissions.

Our team can also help you engage with stakeholders and perform a materiality analysis to identify the issues that matter most to your stakeholders, including investors, customers, employees, and others.

With deep knowledge across industries and deep ESG expertise, our team is here to help

At Crowe, our teams have been working in the ESG space for years, understanding the intersections of regulations, standards, business trends, and best practices. We combine that understanding with our deep knowledge of corporate governance across industries to help you create a practical and scalable plan for your business.

We’re here to set you up to speak confidently about what you’re doing and why it matters, and help you make forward-thinking decisions.

Contact us

Our team can help you create the right ESG strategy for your business. Reach out and let us know what questions we can answer.