Organisations are racing to declare their sustainable credentials… but should they tread more carefully?
On the surface, the growing focus on Environmental, Social, and Governance (ESG) appears to be good news.
After all, integrating ESG into decision-making makes sound business and risk management sense as well as being good for the planet. All organisations face ESG-related issues, and these could present financial or reputational risks if not properly managed or mitigated.
However, vague, and seemingly fluid, reporting requirements and conflicting standards have led many to question whether companies are truly as green as they say they are.
The growing scrutiny on ESG leaves businesses exposed and therefore needs to be on the risk manager’s radar.
However, experts are divided on the role that risk managers should take when it comes to managing ESG.
One problem is that the wide-ranging set of risks mean that risk managers are unlikely to be experts in all of the underlying threats, and so assigning ESG to the risk department could cause problems down the track.
Instead of risk managers taking a leading role, perhaps they should be using their skills to support those individuals dealing with risks on the ground.