ESG
How we can help?
Our multi-disciplinary teams with a focus and expertise of working with social purpose and non profit organisations can help you understand the risks, opportunities that arise from ESG-related issues and plot a successful course through a rapidly changing landscape:
ESG Strategy
It is important to put ESG objectives and plans in the context of the organisation’s purpose, particularly for social purpose organisations where any misaligned communication has the potential to create reputational risk.
The first step is to understand the expectations of key stakeholders and therefore help set the organisational ambition with respect to ESG.
ESG Governance and structure reviews
An effective ESG strategy requires oversight and leadership from the board and senior team. Social purpose and non profit organisations will need to ensure that they have the appropriate mix of skills and expertise to drive the organisational change needed. Ensuring appropriate allocation of ESG responsibilities within board committees and effective executive ownership is an enabler of success. Reviewing policies and procedures, evaluating the performance of the board and employing governance and cultural health checks will shed light on any areas requiring further attention in achieving the organisational goals.
It is important to put ESG objectives and plans in the context of the organisation’s purpose, particularly for social purpose organisations where any misaligned communication has the potential to create reputational risk.
The first step is to understand the expectations of key stakeholders and therefore help set the organisational ambition with respect to ESG.
An effective ESG strategy requires oversight and leadership from the board and senior team. Social purpose and non profit organisations will need to ensure that they have the appropriate mix of skills and expertise to drive the organisational change needed. Ensuring appropriate allocation of ESG responsibilities within board committees and effective executive ownership is an enabler of success. Reviewing policies and procedures, evaluating the performance of the board and employing governance and cultural health checks will shed light on any areas requiring further attention in achieving the organisational goals.
Risk services
Understanding risk and the level of exposure to uncertainties is critical as social purpose organisations work hard to achieve their objectives. Putting this into clear language that external stakeholders understand and can engage with is important and a materiality grid can be helpful in this regard. The key is understanding what could or must change and the known or recognised risks and opportunities, to ascertain the gap between the uncertainties and the risks. A strong risk assessment can help to prioritise efforts. In relation to ESG, organisational and reputational risk are amongst the key areas to consider. Understanding how climate risk will impact organisations can make use of a range of widely recognised climate scenarios to plot feasible pathways using available data, and support organisations in sizing the risks and planning for a range of possibilities.
Tax services
For social purpose and non profits often championing for tax justice tax is considered a reputational issue.
Therefore boards should be focusing on ensuring that their stakeholders, employees and society and that they do not face any negative publicity from their tax affairs.
Governments around the world are now introducing a range of taxes, levies and their measures as a mechanism to incentivise businesses to adopt improved environmental and sustainability strategies.
For more information, please read our insight on ESG and Taxation.
Understanding risk and the level of exposure to uncertainties is critical as social purpose organisations work hard to achieve their objectives. Putting this into clear language that external stakeholders understand and can engage with is important and a materiality grid can be helpful in this regard. The key is understanding what could or must change and the known or recognised risks and opportunities, to ascertain the gap between the uncertainties and the risks. A strong risk assessment can help to prioritise efforts. In relation to ESG, organisational and reputational risk are amongst the key areas to consider. Understanding how climate risk will impact organisations can make use of a range of widely recognised climate scenarios to plot feasible pathways using available data, and support organisations in sizing the risks and planning for a range of possibilities.
For social purpose and non profits often championing for tax justice tax is considered a reputational issue.
Therefore boards should be focusing on ensuring that their stakeholders, employees and society and that they do not face any negative publicity from their tax affairs.
Governments around the world are now introducing a range of taxes, levies and their measures as a mechanism to incentivise businesses to adopt improved environmental and sustainability strategies.
For more information, please read our insight on ESG and Taxation.
Third party and supply chain risks
In the past two decades, there has been a marked increase in the number of third parties and length of the supply chains which organisations rely on.
The impact of reliance on and exposure to third parties can create not only operational issues around shortages and delays of goods and services but also challenges around ensuring safe working practices across the supply chain including anti-slavery provisions, waste management and data protection risks.
For more information, read our insight on Third party risks.
Assurance services
Non financial independent reviews can play a vital role in improving transparency and accountability with stakeholders. The level required will vary according to the area of activity and specific risks identified by each social purpose and non profit organisation.
The social purpose and non profit sector faces increasing scrutiny from stakeholders, beneficiaries and the wider public regarding societal issues such as ESG. Retaining trust and transparency will be critical in ensuring a sustainable future.
In the past two decades, there has been a marked increase in the number of third parties and length of the supply chains which organisations rely on.
The impact of reliance on and exposure to third parties can create not only operational issues around shortages and delays of goods and services but also challenges around ensuring safe working practices across the supply chain including anti-slavery provisions, waste management and data protection risks.
For more information, read our insight on Third party risks.
Non financial independent reviews can play a vital role in improving transparency and accountability with stakeholders. The level required will vary according to the area of activity and specific risks identified by each social purpose and non profit organisation.
The social purpose and non profit sector faces increasing scrutiny from stakeholders, beneficiaries and the wider public regarding societal issues such as ESG. Retaining trust and transparency will be critical in ensuring a sustainable future.
ESG programme development
What gets measured get done in all organisations, so translating ESG governance structures and ambitions into tangible plans (including Net Zero transition plans) is important. Measuring performance helps organisations improve strategic and operational decision making as well as report on their progress on ESG objectives. Social purpose and non profit organisations are by their very nature focussed on the societal changes and therefore their impact. Measuring and reporting on impact is a key step towards enhancing organisational performance and reporting on impact.
ESG reporting
The expectation and format of reporting on ESG matters will evolve as this area continues to develop. Understanding key stakeholders, including ESG rating agencies is an important starting point to establishing a scope for ESG reporting. Whether or not an obligation exists organisations will need to ensure that ESG is reflected within reports, using appropriate metrics and improving the quality and robustness of the data as the process unfolds. Increasingly, climate reporting is requiring organisations to make use of recognised climate scenarios to articulate the organisation’s strategic responses under a range of plausible outcomes.
What gets measured get done in all organisations, so translating ESG governance structures and ambitions into tangible plans (including Net Zero transition plans) is important. Measuring performance helps organisations improve strategic and operational decision making as well as report on their progress on ESG objectives. Social purpose and non profit organisations are by their very nature focussed on the societal changes and therefore their impact. Measuring and reporting on impact is a key step towards enhancing organisational performance and reporting on impact.
The expectation and format of reporting on ESG matters will evolve as this area continues to develop. Understanding key stakeholders, including ESG rating agencies is an important starting point to establishing a scope for ESG reporting. Whether or not an obligation exists organisations will need to ensure that ESG is reflected within reports, using appropriate metrics and improving the quality and robustness of the data as the process unfolds. Increasingly, climate reporting is requiring organisations to make use of recognised climate scenarios to articulate the organisation’s strategic responses under a range of plausible outcomes.
Responsible investments
Social purpose organisations have been at the forefront of driving greater emphasis on responsible and ethical investment. With the ever-increasing attention from governments and ethical mandates being set by individual investors, companies are understandably taking note of ESG factors and so must the social purpose and non profit sector. SRI targets and the ESG analysis all assist in the selection of better quality investments and this may feed through to better investment returns in the long-term.
Whilst some investment managers will focus purely on sustainable investment criteria, many mainstream investment fund analysts are using ESG integration criteria as part of their standard research analysis and company selection process. It is possible to leverage investment managers’ own efforts, given that many are now signatories to the United National Principles for Responsible Investment (PRI) initiative. This is a trend which looks set to continue and will push sustainable investment further into the spotlight.
For more information, please read our insight on ethical investing.
Social purpose organisations have been at the forefront of driving greater emphasis on responsible and ethical investment. With the ever-increasing attention from governments and ethical mandates being set by individual investors, companies are understandably taking note of ESG factors and so must the social purpose and non profit sector. SRI targets and the ESG analysis all assist in the selection of better quality investments and this may feed through to better investment returns in the long-term.
Whilst some investment managers will focus purely on sustainable investment criteria, many mainstream investment fund analysts are using ESG integration criteria as part of their standard research analysis and company selection process. It is possible to leverage investment managers’ own efforts, given that many are now signatories to the United National Principles for Responsible Investment (PRI) initiative. This is a trend which looks set to continue and will push sustainable investment further into the spotlight.
For more information, please read our insight on ethical investing.
