Environment Social Governance: Getting it right

Environment Social Governance (ESG) is increasingly in the headlines for companies globally. This trend is due to a collection of direct and indirect drivers focused on: (1) global environmental and societal challenges (climate change and socioeconomic inequality); (2) stakeholders’ expectations of a company in addressing the challenges; and (3) financial, lending, and insurance institutions requiring companies to demonstrate their ability to create long-term value. Collectively, these efforts are known as “ESG.” Companies are taking various approaches to address these issues, with varying degrees of success. In this article, we share our perspectives as ESG and sustainability practitioners on how to get ESG strategy right—or at least better—with an eye toward the legal role in corporate ESG management. Companies can simplify ESG by using internal systems and risk management strategies, in order to enhance value. We do recommend that in-house or external legal counsel be involved in or lead the process.