The ESG Journey: Start with Governance
ESG can be overwhelming and it certainly has garnered some negative attention in recent times. But it's important to remember that not ALL ESG factors will be material for a business - and that integration of ESG considerations is a journey.
So, if ESG integration is a journey, what is a good starting point? For some businesses, it may be easy to identify particular externalities that fall within an ESG bucket - consider the requirement of completing environmental impact assessments for mining or energy projects, which fits pretty firmly in the Environmental externality category.
But when the linkage may not be as apparent or there is disbelief in general about the applicability of ESG, I recommend starting with Governance.
Why? Because good governance isn't contentious, and a good portion of the basics of Governance are required under legal or regulatory measures. You could consider some of these questions to get a baseline:
Does the Organization have a Board of Directors? Are some of the Directors independent?
Does the Organization have a Code of Conduct?
Does the Organization have policies for anti-money laundering, anti-corruption, or other compliance concerns?
Does the Organization have a Compliance Officer?
Does the Organization complete independent audits with a third-party auditor?
If products deal with personally identifiable information ("PII"), are there procedures in place for storing and maintaining data privacy?
As you can see, these are broad and basic questions designed to get folks thinking about what good governance means. They aren't challenging and are often things you would expect within an organization - which makes them the ideal way to demonstrate the linkages between running a sustainable business and ESG considerations.