Organizations who embrace governance in all its capacity are those that understand the need for effective leadership and its positive impact on a company. Key governance measures for ESG include creating a strong risk and control environment, implementing effective leadership throughout management and the board, advocating stakeholder rights, promoting transparency and awareness.
Furthemore, in today’s world of growing cyber threats, good governance extends to measures for ensuring the safety and security of an organization’s assets, managing third-party vendor relationships, avoiding mismanagement and ethical issues, and more. What Does it Mean to be Governance Driven? For organizations seeking to embrace the G in ESG, it should mean the following: Developing and implementing a strong system of risk management and controls. Fostering a culture that advocates honesty, transparency and ethical behavior. Maintaining effective leadership throughout all levels of an organization. Participating in political engagement and public policy. Safeguarding privacy and cybersecurity by implementing robust internal controls. Why ESG? Attention to ESG issues is becoming critical to long-term competitive success. Major institutional investors are making it clear that they expect the companies they hold to take a proactive approach to ESG. Millennials, and even younger generations, care deeply that the companies they work for (and the businesses they support) embrace values that are aligned with their own. Sustainable/impact investing is actively growing at double-digit rates. Companies that proactively address ESG issues can set the bar for an entire industry.