A major business and investing trend that has been gaining steam over the last few years, that you may or may not have heard of is, Environment, Social and Governance (or, ESG). Boiled down to its essence, ESG is a collection and management of potential risks and organizational principles that many companies are addressing and monitoring to provide investors and other stakeholders a roadmap of their future financial health and operational performance. Broken down more specifically, ESG would be defined as:
Environmental: The commitment of an organization to conserve the natural world. In practice, how organizations manage their internal initiatives for climate change, waste management, energy efficiency, etc.
Social: The commitment of an organization to people & relationships, be they internal (e.g., employees) or external (e.g., vendors, patients, clients). Organizations managing an ESG program would measure and report on diversity and inclusion, anti-harassment and discrimination, working conditions, patient satisfaction, and the organizations participation within the communities they operate.
Governance: The overarching standards for which the organization is managed. Management would include the measuring, monitoring and reporting on finance and tax strategies, whistleblower and incident reporting, fraud, waste and abuse, and the overall transparency and accountability of the management team.
Those of us in the compliance world can probably spot the striking similarities between ESG and how we have been taught to define and manage an effective governance, risk, and compliance (GRC) program. Whether your organization has committed to, and continues to manage, the proper disposal of harmful wastes, or monitors and reports on patient safety and outcomes, or you have formal channels for employees to report suspected incidents of non-compliance, you’ve been practicing the guidelines of an ESG program. And you may not have even known it.
Whether or not ESG is something that’s been on your radar, or you’re just now hearing about the movement, I’d argue that it’s a topic worth exploring. Not only because of its striking similarities to GRC, but because many organizations and analysts have begun creating models to predict how an effective internal ESG program can become a leading indicator of an organization’s future health.
Which is why I thought we’d explore the topic in detail in our upcoming webinar, to be held on Wednesday, May 5, titled “The Untold Synergy Between GRC and ESG Programs.” During this 60-minute presentation, I’ll discuss the parallels outlined above, then dive into how you can begin managing an ESG program using the tools and processes you’re already leveraging, including:
- Creating and Updating Policies, Procedures and Written Standards
- Identifying, Monitoring and Managing Risks
- Measuring and Reporting to the Governing Board on Strategic ESG Initiatives
If you’ve noticed some additional parallels not mentioned above, that you’d like to hear more about, feel free to drop some suggestions in the comment section below.
Hope to see you there!
(FYI - By joining the discussion, you’ll also receive 1.2 HCCA-certified CEU credits.)