Twenty years ago, the United Nations published the groundbreaking “Who Cares Wins” report, in collaboration with the UN Global Compact and Switzerland, with funding support from Italy, Luxembourg, the Netherlands, and Norway. This report marked a pivotal moment, introducing the concept of ESG (Environmental, Social, and Governance) criteria into mainstream dialogue. It emphasized the importance of integrating ESG factors into capital allocation and portfolio management, using IFC’s investment practices as a model.
But what does this mean for employers two decades later?
The significance of ESG has transformed dramatically over the past twenty years. The “Who Cares Wins” report convincingly argued that incorporating ESG factors into capital markets not only made sound business sense but also led to more sustainable markets and better societal outcomes. As the connection between ESG factors and financial performance became clearer, the investment community increasingly recognized their importance. Institutional investors, asset managers, and financial advisors now view ESG criteria as essential components of risk assessment and long-term value creation.
In recent years, regulatory requirements for ESG reporting and disclosures have surged, particularly in Europe with the EU’s Sustainable Finance Disclosure Regulation (SFDR) and globally through initiatives by bodies like the IFRS. There’s a growing consensus that ESG factors are vital for assessing not just business sustainability but also global challenges like climate change and social inequality.
Today, developing an ESG strategy for a large corporation is a complex process that involves several key stages, from initial assessment to full implementation and continuous monitoring. Even the best policies can fall short without proper alignment with employee awareness, training, and guidance.
At Wilkinson Hall we start with a comprehensive assessment to establish a baseline:
Current Status Evaluation: We assess your corporation’s existing ESG practices and impacts, covering environmental footprint, social practices such as labor conditions and community engagement, and governance structures.
Stakeholder Engagement: We identify and engage with stakeholders, including employees, customers, investors, and community representatives, to gather valuable insights and expectations.
Materiality Assessment: We conduct a materiality assessment to determine the ESG issues that matter most to your stakeholders and where your company can have the most significant impact.
Using these insights, we develop a tailored engagement, adoption, and measurement strategy to ensure maximum impact and cultural benefit. Our goal is to help you create an effective ESG strategy that not only meets regulatory requirements but also drives positive change within your organization and beyond. Author, Founder of Wilkinson Hall.