In the previous post we discussed how integrating ESG Risks with Enterprise Risk Management provides a robust and agile framework for real-time visibility into ESG Performance. The insights gained can then be used for
- Assessing Company’s medium and long-term viability and resilience that depends on its ability to identify ESG Risks
- Evaluating ESG performance and reporting them to Boards and C-suite to assess overall resource needs to eliminate redundancies and help optimize resource allocation
- Identifying ESG trends that lead to new Business opportunities
- Better understanding of ESG performance to provide transparency and disclosure expected by the Investors and Stakeholders
Monitoring ESG Performance should be an ongoing, engaging, agile and innovative process focused on generating value for Organizational Sustainability as well as Growth. Not surprisingly, Environmental, Social and Governance issues can trigger a crisis that can lead to fundamental changes in a company’s management, culture and of course its Financial health. As investors seek value from ESG, Companies who are very well prepared for addressing these challenges can better mitigate downside risks, capture investor interest and establish the long-term value of ESG management.
Leveraging ESG Information : Putting Big Data and Artificial Intelligence into action
Risk Managers need to understand the latent Risks embedded in their Company’s business model before they become a full-blown risk. The disclosure of ESG information can help mitigate the immediate impact of an ESG Risk when it occurs.
To increase and maintain investor confidence, Risk Managers need to show how they are prepared to respond to ESG issues and prevent them from turning into a longer-term problem. Disclosure of ESG information gives a clearer explanation of how ESG risks are identified, assessed in terms of their materiality to business value and managed. To achieve all of these, Real time Reporting and Collaboration best practices need to be employed. These best practices make use of Emerging Technologies like Big Data and Artificial Intelligence driven Analytics to take Risk and Opportunity Reporting to the next level of Transparency and Efficiency.
To capture value derived from ESG management, Corporate leaders can demonstrate to their investors how they are getting ahead of ESG Risks in their day-to-day management and building Resilience before the next ESG shock. This may entail a strategic rethinking of the Business, including new Product Innovation and other steps to increase Profitability and Sustainability.
These and many more critical focus areas around ESG is the key agenda of the insightful Panel Discussion on October 2nd where Confident Governance Chairman and global Governance Leader Bhavesh Bhagat will be sharing insights on Best Practices for leveraging ESG Reporting for Growth and Sustainability, along with fellow Directors from other Industry Verticals at the 2018 NACD Global Board Leaders’ Summit.
Delivering Confidence in Governance to Businesses of all sizes and across all Industry Verticals is our vision and mission. Stay tuned for more insightful posts on latest Governance trends!
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