Bloomberg Law’s ESG Survey 2020 reveals an opportunity for companies to improve their environmental, social, and governance program’s effectiveness by integrating it into their overall corporate compliance programs.
Gaps in ESG Programs
Bloomberg Law recently surveyed 100 legal professionals, both law firm and in-house practitioners, and asked them about their organizations’ ESG programs. The results reveal potential gaps in the coverage of corporate ESG programs.
While most respondents (70%) from corporate in-house legal departments indicated that their organization has integrated ESG considerations into its existing risk management framework, 40% of them reported that their ESG programs are not integrated within their organization’s traditional compliance infrastructure. This reveals an opportunity for these companies to increase the level of ESG integration within their compliance programs and to foster a holistic approach to ESG management.
Why Take a Holistic Approach?
Companies with ESG programs that are integrated within their corporate compliance and risk management programs are likely to be more effective in identifying and managing growing ESG risks than if the programs were structured separately.
These risks include not just increased exposure, but reputational damage for failing to properly address stakeholders’ concerns over certain ESG issues, such as workplace safety during the Covid-19 pandemic.
Unfortunately, most companies’ ESG and compliance/risk functions still work in silos, which limit cross-team collaboration and block a complete understanding of ESG risks and impacts organization-wide. This can also restrict an ESG program’s ability to effectively respond to a crisis like the pandemic, according to recent Bloomberg Law analysis.
Companies can start breaking down the silos by integrating ESG policies and procedures into their compliance infrastructure. This will help them better control and monitor emerging ESG risks and foster a culture of ESG compliance across the organization. It’ll also help them prepare to respond to the next crisis more efficiently.
Bloomberg Law subscribers can find related content on our In Focus: ESG resource.
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