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Why ESG success requires effective Policy Management (Strategy, Systems and Processes)

Why ESG success requires effective Policy Management (Strategy, Systems and Processes)

ESG – environmental, social, governance – is pressuring organizations from various angles. 

Corporate investors are making investment decisions based on ESG practices. Executives and board members are fired if they do not meet ESG metrics. Various regulations, some specific and some broad, require ESG compliance, reporting, and engagement. Employees and business partners decide who they work with based on shared values.

In this context, many organizations are starting ESG strategies and processes. The common question is: where do we start?

The answer is simple: you start with your existing policies.

[WEBINAR] Got ESG? Show Me Your Policies! – Register here

ESG starts with policies

Everything related to ESG gets codified in the policies of the organization. Starting with the Code of Conduct and filtering down into the array of environmental policies, social and human resources-related policies, and the expanse of governance-related policies of the organization. 

The policies define the organization’s values and provide the framework for ESG compliance and reporting.

Organizations begin ESG by inventorying their existing policies and mapping them into the ESG context they are building. 

[Image – Ekko screengrab of a policy & procedure library]

From there, the organization can determine which policies need to be revised as they do not fit their ESG desires and commitments, and which need to be written as there is no existing policy.

(Effective) policy management processes are crucial for ESG program success

This is where a well-defined policy management program that has clearly defined processes supported by a robust technology architecture provides the foundation that ESG is built upon

Policies define the framework of values, behavior, and culture of the organization. With policy management, the organization can ensure that its policies are written and mapped to the ESG framework and that they are properly maintained as the organization’s commitments and values evolve.

Ensuring policy engagement

Further, the right policy management platform also ensures policy engagement. That employees are aware of ESG-related policies, are properly trained in their context, and provide attestations to understanding and behavior. 

This can also be extended to the breadth of the extended enterprise to ensure they understand ESG policies and provide attestation to their conformance in doing business with the organization.

Policy management is delivered on a solid policy management platform that delivers policy engagement and awareness to ensure that the organization’s values and commitments are understood. This defines, builds, and guides the organization’s culture in the right direction.

Measuring ESG compliance

This also enables the organization to provide a framework of policy statements/commitments that can be mapped to controls in the organization. This is then used to measure the state of ESG compliance. 

Where there are exceptions and non-conformance, this can be addressed to bring the organization in compliance to its ESG commitments as codified in policies. 

Audit functions likewise use policies and the evidence of policy management to provide assurance to stakeholders that the organization is living up to its ESG commitments and values; to verify that ESG is not a fiction of smoke and mirrors in the organization.

[Image – Ekko screengrab illustrating policy engagement]

ESG succeeds (or fails) on the strength of policy management and engagement strategy

At the end of the day, ESG is about the organization’s integrity. What it has established as its ESG values and commitments within the organization’s policies is a reality and defines the true culture, character, and behavior of the organization. 

It is safe to argue that there can be no strong ESG program or initiative without addressing a robust policy management and engagement strategy and process supported by an agile information and technology architecture.

Why you can’t address ESG without effective policy management

Join me on May 25 to take a deeper dive into why ESG program success relies so heavily on effective policy management, and how the Ekko integrated policy, training and engagement platform provides organizations – especially those in highly-regulated industries – with a robust yet simple solution to a complex problem.

Not sure you can make it to the live session? Register here and we’ll send you the recording anyway.

Hertzel Kuriel
2024-06-16T11:11:23+00:00

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