The Tech Box
Tackling ESG
If your company hasn’t already created environmental, social and governance (ESG) metrics, you might want to get that started. 57% of chief financial officers in a
2021 Q3 CFO Grant Thornton LLP survey
have made it a priority to invest in ESG efforts since the start of 2020.
This reflects the change that Business Roundtable made to their
Principles of Corporate Governance
, from describing the purpose of a corporation as principally serving shareholders to benefiting
all
stakeholders - including consumers, employees and the communities they impact. Business Roundtable members are CEOs of leading U.S. companies that collectively represent every sector of the economy.
The financial aspect of ESG is a set of standards for company operations that helps investors make strategic and socially conscious decisions about where to put their money.
According to
Investopedia
, using ESG criteria is an increasingly popular way for investors to evaluate companies in which they might want to invest. And it helps them strategically assess companies that could pose greater financial risk due to their ESG practices.
The SEC is promoting ESG through the financial markets by proposing to mandate
disclosure of climate-related financial risks
. And is “taking steps to bring the United States into parity with other advanced economies … to address the issue of global climate change.” (See
National Law Review
article from March 11
, or
WSJ
March 21.)
Climate risk, regulatory pressures, data security and consumers wanting to buy from companies that share their values are all reasons to begin tackling ESG at your company. On top of that, your customers may be asking you to reveal environmental impacts.
That said, in the same survey, 70% of respondents reported being worried that talent shortages jeopardize their ability to meet short-term strategies. 49% indicated that attracting and retaining talent was a top priority. “ESG isn’t just something you worry about with investors, customers and regulators,” … “Employees want to work for employers that share their values, embrace diversity and demonstrate real care for their well-being and advancement.”
Metrics are constantly evolving so it’s critical to begin to create your own metrics that will drive your performance and social responsibility. So, how do you start? A
recent Forbes article
has five steps that will help:
The time is now to begin laying the groundwork for your ESG initiatives. ESG will become a core part of doing business and you have an opportunity and motivation to get started.
Thanks,
Mary Alice
# # #
Mary Alice Drain is the Director of Technical Services at Fibre Box Association (FBA). If you have technical questions about the corrugated industry, you can reach her direct at
mdrain@fibrebox.org
.