Governance, Risk, and Compliance are becoming integral for all enterprises, and many opportunities and trends are becoming essential for GRC professionals. ESG, or environmental, Social, and Governance surely deserve special mention among the most influential trends.
ESG, an Investment Framework
The core concept of ESG, as an investment framework, would be allocating needed importance to social and environmental policies in corporate processes and decisions. The desired outcomes can be easily achieved, which mostly revolve around a highly sustainable market outcome. Investors are now making the ESG, i.e., the environmental, social, and governance-related opportunities and risks while making investment decisions.
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Every organization has to encounter a new set of challenges and opportunities. Every enterprise has to be accountable for its practices.
Every board of directors has to consider ESG as one of its priorities. Moreover, the trend is expected to persist in the current year and well into the coming years.
Including ESG performance metrics in an enterprise’s overall risk management approach would be necessary for all. Earlier, a profit-focused system was mostly seen. Nowadays, it is more than essential to go beyond or retain a strategy rarely restricted to maximizing profits.
Instead, what experts suggest is a purpose-driven approach. Incorporating ESG into an organizational framework is essential to build a solid foundation to deal with the current environment, which is equally challenging and encouraging.
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Still, an integrated framework of ESG is not an easy task to complete. To leverage maximum benefits through an ESG approach from a GRC perspective, the ESG integrated framework should naturally align with GRC. Or, the ESG approach should be in such a way that the natural relation between ESG and GRC is maintained. To explain it well, organizations must ensure a simplified and streamlined NSG framework. Further, it should be able to have a strong connection towards different requirements of the organization, that range from social, governance and environment, compliance and risk.