By Elizabeth Lynch
As societal issues push ESG issues to the forefront, companies must show, with hard numbers, that they are listening to not only their investors but also their customers and employees by integrating environmental, social and governance risks and opportunities into their business strategies.
ESG is a framework to build long-term financial sustainability and deliver long-term value through effective engagement with all stakeholders, explains Maura Hodge, KPMG National ESG Assurance Leader.
In a new KPMG podcast, Hodge talks to John Capone, Audit Partner, about what ESG is, why it’s important and how to tackle it.
Audit committees have an important role to play in meeting stakeholders’ ESG demands, Hodge noted. While they do not set a company's ESG strategy, they must understand business priorities and material ESG topics, and, most importantly, the intersection between the two. Ultimately, ESG reporting should reflect both what a company is doing and what the company intends to do through its operations, Hodge said.
For companies, the stakes are real. Reporting on ESG enables a company to:
No matter whether a company is initially developing ESG goals and policies, working to improve the sophistication of metrics and credibility in reporting, or pushing on the edge of innovation, effectively addressing ESG topics should be a long-term strategy embedded into the company's core business activities.