Integrating operational ESG: Greenwash is becoming increasingly risky for organisations who continue to lag behind the pack
Henderson Risk’s white paper provides a road map for the implementation of operational ESG risk management to help deliver on the true purpose of business and build value across the board
A year on from the publication of Henderson Risk Limited’s ESG white paper in March 2021, written by Professor Paul Cornish, its lessons for organisations across the spectrum of ESG integration remain apt.
At this stage of the game ESG is nothing new, however ESG’s position at the centre stage of business, political and social discourses is becoming ever more entrenched. Despite the voices of ESG critics getting louder, with hot debate over the financial, environmental, and social impacts of ESG and ESG investing methods, Google searches for ESG reached an all-time peak in February 2022.
Deniers have repeatedly highlighted the representation of ESG as a panacea to all of societies and the Earth’s problems. The point is that organisations must look beyond the financials and integrate ESG’s core concepts into policies and procedures to generate the positive outcomes it espouses.
More and more companies have become adept at ‘greenwashing’, continuing a business-as-usual approach whilst using marketing and communications to capture the potential value of socially relevant buzzwords. It seems that many firms and individuals believe they can use ESG, much like ‘sustainability’, to become another box-ticking exercise to capture revenues from popular trends. However, under an ESG paradigm box-ticking will not cut the proverbial mustard.
Rio Tinto, the top-rated extractive organisation in the 2018 Corporate Human Rights Benchmarking survey, experienced the sharp end of this shift in 2020, when most of the executive management team resigned after destroying caves with cultural value to local indigenous groups, albeit acting within the law.
According to Larry Fink, CEO of BlackRock, failure to learn these lessons and mitigate ESG related risks is a failure to prepare for a ‘significant reallocation of capital’.
The key to capturing the true potential value of ESG is taking a more context-conscious approach to doing business. Download the ESG white paper above to read in detail about ESG, why it matters, and what your organisation can do to build and retain value across the board.
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