Governance, including ESG discussions

How organisations manage themselves – their governance systems and approaches – forms a central component within social evaluations. The first element relates to which stakeholders should be prioritised by organisations and their leaders. This very public debate has outsized implications for the way in which organisations are socially evaluated. Today, there is also growing interest in the ESG (Environmental, Social, and Governance) commitments now being adopted by organisations as part of their responsible business policies and in pursuit of their stated purpose. For organisations, how they govern these environmental, societal and governance activities, how they prioritise different stakeholders, how they choose to report and communicate their actions, and the appropriate timeframes for action have become critical factors in social evaluations. These evaluations are made more complex because of the different national, regulatory, and cultural contexts and expectations in which they operate. There is also mounting evidence that ESG activities are unlocking new sources of innovation and growth.

Investors have, for many years, also been growing their ESG investing strategies and funds under management. More recently, investors now embed ESG questions into most, if not all, of the due diligence and oversight conversations with the organisations they choose to invest in. Finally, regulators around the world are starting to mandate certain types of ESG reporting, led by the International Accounting Standards Board (IASB), the Sustainable Accounting Standards Board (SASB) and others.

Corporate Governance – from EPS to ESG

Business leaders are expected to successfully manage rapid complexity.  This is hard to do well.  Seismic economic turbulence arising from globalisation, covid-19 and one of the greatest upheavals in technology since the industrial revolution are among the...