Environmental, Social, and Governance (ESG) Management
A recommended approach to managing environmental, social, and governance (ESG) risks and opportunities, using the Diligent ESG solution in Diligent HighBond.
First things first: What is ESG?
ESG includes three central risk factors in measuring an organization’s commitments to ecological sustainability, to its community, and to corporate governance. Multiple issues fit into the umbrella categories of environmental, social, and governance. These include:
Environmental: the preservation of our natural world
- Climate change.
- Carbon emission reduction.
- Water pollution and water scarcity.
- Air pollution.
Social: the consideration of humans and our interdependencies
- Customer success.
- Data hygiene and security.
- Gender and diversity inclusion.
- Community relations.
- Mental health.
Governance: the logistics and defined processes for running a business or organization
- Board of directors and its makeup.
- Executive compensation guidelines.
- Political contributions and lobbying.
- Venture partner compensation.
- Hiring and onboarding best practices.
Why does ESG matter to your organization?
Regulatory bodies, investors, and other stakeholders are turning their focus to ESG, calling for organizations to be held accountable to ESG standards and report on their progress. To be viable for the long-term, organizations should understand their impact on the environment and stakeholders, and ensure sound governance practices.
Meanwhile, as organizations contemplate the need for an ESG solution and evaluate their options, it’s important to keep in mind that:
- Employees are requesting more details about an organization’s ESG activities, such as commuting and travel carbon footprints, energy efficiency, supply chain sustainability and ethics.
- Institutional investors are using ESG information to mitigate portfolio risk, identify new investment opportunities and assemble proxy season proposals.
- NGOs are using ESG information to identify companies to engage.
- Consumers and business partners are factoring an organization’s ESG behavior into purchasing decisions.
This is where Diligent ESG comes in!
Diligent ESG management overview
From the board to day-to-day operations, Diligent ESG can help you manage an entire organization to act upon, monitor and report on ESG directives. This solution simplifies ESG data collection, benchmarking and reporting, and provides audit-ready documentation for every step of the process.
Challenges and opportunities
This program requires first understanding which environmental, social, and governance issues matter most to your organization. Once you have determined what matters most, you will be able to:
- Streamline the collection of relevant ESG data:
- Easily consolidate different types of ESG data from across your business.
- Integrate industry intelligence.
- Compare against external benchmarks.
- Confidently disclose to regulators, investors and different stakeholders:
- Report against most common ESG standards.
- Map metrics (the data you have collected) to specific ESG framework requirements.
- Continuously monitor and improve ESG outcomes:
- Continuously monitor your ESG metrics and know in real-time when data trends the wrong way.
- Easily be audit ready and confidently demonstrate your ESG commitment to investors.
- Robots and API integrations automate data collection and support other data entry capabilities including, direct entry, bulk uploading and auditable surveys.
- Improve operations and behaviors through improvement and action plans to advance ESG outcomes.
How it works
The workflow for the solution leverages the power of different apps in HighBond, including:
- The Projects app, which is used to organize different types of ESG data collection activities and provide a central location for data and evidence to be stored.
- The Frameworks app, which is a library of ESG frameworks from where the users can import all the regulations and standards.
- Setting up your program.
- Gathering and continuously monitoring your data.
- Reporting and communicating progress.
- Creating improvement plans.
- Collecting your data once, comply to multiple ESG standards.
- Linking data collection activities to strategic commitments.
Doing it in Diligent HighBond
- Getting started with Diligent ESG: Learn more about Diligent ESG components and get started.
- Setting up your Diligent ESG program: Set up your program using the Projects and Frameworks apps.
- Gathering and continuously monitoring your data: Gather and monitor data using the Projects and Results apps.
- Reporting and communicating your progress: Report your data, communicating the organization’s ESG posture.
- Creating improvement plans: Ensure that suggested improvements can be actioned.
- Collect data once, comply to multiple ESG standards: Harmonize compliance activities across multiple ESG standards.
- Linking data collection activities to strategic commitments: Align goals with relevant ESG Frameworks and organizational objectives.
- Environmental, Social, and Governance (ESG) Insights toolkit: View ESG health of your organization, track and trend ESG health scores over time, and compare against your industry peers.