The role of ESG in your resilience strategy
The Complete Guide to Operational Resilience introduces the 7 Dimensions in which an organisation should seek to mature their approaches to resilience, one of which is ESG.
ESG (environmental, social and governance) initiatives are a broad set of activities that enterprises can undertake to promote sustainability and make their efforts to be good corporate citizens transparent. ESG initiatives can involve many different stakeholders, including employees, customers, suppliers and investors, helping to foster trust and co-operation and reduce risks.
In recent years, there has been a growing trend for enterprises to adopt ESG initiatives. This is partly due to the complexity of modern business operations, which often span multiple jurisdictions, involve a large number of stakeholders and are increasingly digital.
As digital environments grow, they can become more complex and fragile at the same time as the business is becoming more exposed to the impacts of both environmental disruption and societal turbulence.
ESG and resilience
ESG is therefore an important aspect of any holistic resilience strategy, interacting with a number of the other dimensions.
ESG and Regulation
With new climate laws and regulatory changes, ESG initiatives are quickly shifting from discretionary activity to mandated requirement. This shift impacts every area of the enterprise. And for most enterprises sustainability and ESG programs are data and technology intensive.
ESG and People
Leaders must start setting ESG goals as part of their customer and talent acquisition, customer retention, and product strategies. These goals are quickly becoming part of how employees choose an employer, how shareholders choose an investment and how customers choose a service provider.
ESG and Continuity
A mature approach to ESG can help ensure business continuity in the event of a natural or man-made disaster. By taking a holistic view of ESG risks and opportunities, businesses can build resilience into their operations and mitigate the potential impacts of disruptions. For example, a company that assesses its exposure to climate-related risks and develops plans to adapt its supply chain accordingly will be better positioned to weather a severe weather event. Similarly, a company that engages with its stakeholders on ESG issues is more likely to have the support of those stakeholders in the event of a crisis. In today's increasingly complex and interconnected world, resilience depends on a company's ability to identify and manage ESG risks.
What does a mature approach to ESG look like?
Data is essential for making informed decisions. This is especially true when it comes to sustainability and ESG initiatives. In order to effectively manage resources and reduce environmental impact, organisations need to be able to gather, analyse and exploit data from a variety of sources. This requires a robust and reliable IT infrastructure.
Fortunately, there have been great strides made in recent years in terms of smart technology. Today, there are a variety of tools available that can help organisations to collect and utilise data more effectively.
However, it is important to note that these tools are only as good as the people using them. Technology leaders therefore play a crucial role in ensuring that sustainability and ESG initiatives are well-coordinated and cross-functional.
As Saadia Madsbjerg noted in an article for the World Economic Forum: "Until businesses and investors embrace an approach where resilience is a consistent thread running through ESG, they will remain ill-equipped to rebound most effectively from the crises that inevitably lie in our future."
The Complete Guide to Digital Operational Resilience
Explore each of the 7 dimensions of operational resilience in more detail in The Complete Guide to Digital Operational Resilience.
The Guide breaks down each of the dimensions into a set of resilience capability indicators, allowing organisations to be measured and providing insight that your teams, investors, customers and regulators will be keen to understand.
Measured against the Cloudsoft Operational Resilience Maturity Model, this helps organisations understand their current resilience maturity level and identify any gaps to be mitigated; now to demonstrate compliance, and in the future as resilience matures.
Download your copy of the Complete Guide to Digital Operational Resilience via the form.