ESG as a risk management tool
Kylie Ford explains why ESG is an extremely useful tool for managing enterprise risk and how viewing risk management processes through the lens of ESG helps you stay ahead of longer term risks
Hello, my name is Kylie Ford and I'm a Senior ESG Consultant at Goby. I've actually been in the ESG and sustainability space for about a decade.
And one thing that always strikes me that we're still having these conversations is that it can be really difficult to get ESG programs moving because of this attitude of "Oh, it's one extra thing we have to do on top of everything else... How do we possibly have time for ESG?" And the reason it strikes me is because truly ESG is a risk management tool.
In fact, I'd argue it's just a lens to integrate into your existing risk management processes. It's really not anything new. And why do I say that?
Well, simply put, ESG or sustainability or the triple bottom line, whatever you want to call it, it's a way of examining how your company interacts with the world, whether we're talking the physical environment, or the social world, through our communities and workforce or even the competitive world through governance practices.
And the impacts that it forces you to examine are ones that are normally external to our existing risk management processes or accounting procedures. You know, we know employee turnover has a cost to companies. But it's really hard to pinpoint exactly how to prevent against that.
But the thing is, by utilizing an ESG lens with your risk management, it forces you to continually examine your company's sustainability in the most traditional sense of the word, the ability to continue sustaining into the future.
So it keeps you oriented on these longer term risks, things like major business disruptions, something that we're all experiencing a lot of this year. In addition, it also kind of keeps you focused on these process risks, policies that support a happy and healthy workforce, that otherwise you just might not be reacting to, because there's so much in the day to day in terms of market risk that normally has to be, you know, sort of sorted through.
So, you know, if you've ever met with any resistance for getting your ESG program moving, I do encourage you to view it through the lens of a risk management tool, and maybe even try to push it forward through that way. It could just be adding it as an agenda item onto a committee meeting that you already have for risk management.
And then also feel free to reach out; we absolutely love talking with individuals about how to get ESG programs moving and how we can help you with your own company's risk management.