5 Key Benefits of Integrating ESG Into Your Compliance Assurance
In today's business landscape, Environmental, Social, and Governance (ESG) factors have gained significant prominence as organizations worldwide are recognizing not only the importance of incorporating sustainable and responsible practices into their operations but also the many benefits of doing so.
As a result, ESG considerations have become—more and more—a crucial aspect of corporate decision-making, risk management, and stakeholder engagement, and with so many parallels to corporate compliance issues, integration of the two makes sense.
Now that Schellman is expanding into providing ESG services to go with our extensive and established compliance and cybersecurity offerings, we’re in a unique position to outline how and why such integration could be advantageous to your organization.
In this article, we’ll explore how integrating ESG within compliance assurance core services can enhance your organizational value, build trust, and contribute to long-term success.
What is ESG?
To get to the point of integration though, means first understanding the two elements we’re advocating to combine. Your compliance obligations, of course, depend on your business regulations and customer requirements for adhering to certain security standards, but what is ESG?
To know, we can first break down the acronym ESG itself, which references your organization's:
- Environmental impact
- Social responsibility
- Corporate governance practices
As those ideas are incredibly broad, ESG actually encompasses more specific factors like your:
- Sustainable resource management
- Employee well-being and diversity
- Ethical business conduct
- Community engagement, and more.
Embracing and prioritizing these items—and ESG as a whole—is a transformative step towards building a more sustainable and inclusive future that can also position your organization as a leader in driving positive change.
And while compliance has long made the jump to becoming an expected staple of doing business, the still-evolving market demand for ESG transparency and reporting from investors and stakeholders alike is propelling it from a niche concern to a similarly mainstream business imperative.
5 Ways Embracing ESG Will Strengthen Your Compliance Assurance
To more easily manage these two demanded initiatives and better satisfy your customers, it’s possible to integrate them by leveraging your existing frameworks, methodologies, and expertise to evaluate and enhance trust in your sustainability efforts.
Combining ESG assurance with compliance assurance represents a strategic opportunity for organizations to strengthen their commitment to sustainability, responsible practices, and stakeholder trust, but it also can yield five other big benefits:
1. More Comprehensive Assurance:
Because ESG integration allows organizations to adopt a more holistic approach to governance, risk management, and compliance, by considering ESG factors alongside your established compliance requirements, you can address a broader spectrum of risks and opportunities, leading to more robust and comprehensive assurance.
2. Streamlined Reporting:
Integrating ESG into compliance means you’ll no longer treat it as a separate reporting exercise—instead, it becomes an integral part of your existing reporting frameworks, allowing you to leverage established reporting structures, controls, and methodologies.
3. Better Efficiency and Cost-Effectiveness:
Working ESG into existing compliance assurance services means you’ll be able to harness your compliance teams' skills and infrastructure to also assess and report on ESG factors.
That optimization of your resources will reduce any duplication of efforts, leading to cost savings and improved efficiency.
4. Increased Stakeholder Trust:
Though their stakeholders are likely one of the primary reasons any organization would look to incorporate more ESG factors in the first place, integration can foster stronger relationships and trust with customers, investors, regulators, and the wider community, as they’ll receive a more transparent view of your sustainable practices, including your commitments to:
5. New Competitive Advantage:
While it may take work to actually complete the integration of ESG within your compliance assurance, you would also gain an extra competitive edge in your market, as those who position themselves as leaders in sustainable and responsible business practices will—going forward—raise their ESG rating scores, attracting more investors, customers, and partners who also prioritize commitment to ESG principles.
By incorporating ESG factors into existing compliance frameworks, you’ll gain all this while also demonstrating your dedication to long-term value creation.
Things to Consider When Implementing ESG
So yes, there are more than a few reasons to move forward with embracing ESG as part of your compliance assurance, and while the exact way you do that will vary depending on your organization,
- Assess Materiality
- Identify ESG factors that are most relevant to your industry, stakeholders, and business operations.
- Mainstream this prioritization exercise through expanded enterprise risk management.
- Focus on areas where your organization can make a significant impact and align with your corporate values and long-term goals.
- Take a Collaborative Approach
- Foster cooperation between compliance, sustainability, and other relevant departments as effective communication and coordination are essential to ensure a cohesive integration of ESG within existing compliance assurance processes.
- Support Training and Expertise:
- Provide training and resources to compliance teams to enhance their understanding of ESG principles and reporting frameworks.
- Consider leveraging external expertise to gain insights and guidance on best practices in ESG integration.
- Equip Technology:
- Leverage technological solutions to streamline data collection, analysis, and reporting processes, as integrated platforms and software can facilitate efficient ESG data management and enhance reporting accuracy.
Combining Your Compliance and ESG Initiatives
As the global business landscape continues to evolve, ESG integration within your compliance assurance is shifting from just a trend to a strategic imperative, as organizations that proactively embrace ESG and embed it within their existing frameworks will be better positioned to navigate the challenges and opportunities of a rapidly changing world.
By aligning your values with sustainable practices, not only will you create long-term value, drive positive change, and contribute to a better future for all, but you’ll also reap extended benefits to your operations, making the effort and investment all the more worth it.
To learn more about the merger of compliance and ESG, please feel free to contact us, as we are currently soliciting feedback as to what organizations seeking to prioritize both are looking for, more specifically, and we’d love to speak with you regarding your needs.
But as we all move forward, let’s embrace the power of jointly assuring ESG and compliance. Together, on this journey toward increased sustainability, responsibility, and shared success, we can build a more resilient and inclusive world while fostering trust, driving innovation, and making a lasting impact.
About AVANI DESAI
Avani Desai is the CEO at Schellman. Avani has more than 15 years of experience in IT attestation, risk management, compliance and privacy. Avani’s primary focus is on emerging healthcare issues and privacy concerns for organizations. Named as one of the 2017 Global Leaders in Consulting by Consulting Magazine she has also been featured and published in the ISSA Journal, ITSP Magazine, ISACA Journal, Information Security Buzz, Healthcare Tech Outlook, and many more. Avani also sits on the board of Catalist, a not for profit that empowers women by supporting the creation, development and expansion of collective giving through informed grantmaking. In addition, she is co-chair of 100 Women Strong, a female only venture philanthropic fund to solve problems related to women and children in the community.