Corporate Responsibility: Global Reach, Local Impact – ESG Criteria

July 15, 2019

Responsibility, humanity and impact are now more entrenched than ever in the corporate sector. A company’s approach to impact is a reflection of that company’s values — and the values of its customers, employees and investors. 

  • Socially responsible investing gradually becoming the new normal.
  • Over 90% of the largest companies now filing sustainability reports (85% of the S&P 500), the data is plentiful.
  •  A recent study from Oxford University found that more than 80% of mainstream investors now consider ‘ESG’ – environmental, social and governance – information when making investment decisions – globally, there are now $22.89 trillion of assets being professionally managed under responsible investment strategies, an increase of 25 percent since 2014. This number is so large it needs context – it exceeds the GDP of the entire US economy.
  • Upswing in investor interest, paired with consumer and employee demand, will bring impact to the top of the agenda at board and C-Suite meetings. “It will no longer be a choice for companies to embed social impact into their business and brand strategies – it will be required to thrive and compete for talent, customers and investors,” – Patsy Doerr, Global Head of Corporate Responsibility and Inclusion at Thomson Reuters.
  • “There is a growing trend for companies to craft their corporate social responsibility strategy around their employees’ passions, first and foremost, as opposed to focusing mainly on their external brand reputation. Today, employees, particularly millennials, expect to work for a company that gives back. But they want to give back on their own terms and have a say in what causes their company supports and how and when they volunteer their time. It is important for companies to survey their workforce and forge relationships with non-profits in areas that their employees are passionate about, and with charity partners that allow you to customize employee engagement opportunities.”
  • In 2019, companies will be asked to provide even more transparency into their strategies and public goals—from the Dow Jones Sustainability Index to the Just 100 Index, companies will increasingly be ranked on their public transparency and disclosure. Companies that provide a transparent roadmap of progress—and challenges—will be poised to help drive collective impact. New industries will continue to rise to the challenge.

What Are Environmental, Social, and Governance (ESG) Criteria?

Environmental, social and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. 

– Environmental criteria consider how a company performs as a steward of nature. 
– Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. 
– Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

SRC: Forbes – What to expect in corporate responsibility 2019