They’re three simple letters: ESG. But what they stand for can often feel like a complex web of requirements, costly entanglements, and a heavy lift.
Even so, nearly 90% of S&P 500 companies are publishing reports about their ESG efforts.
On this episode of “The Balancing Act,” we sat down with Protiviti’s Nick McKeehan and Alyse Mauro Mason about why ESG should matter to you and your company.
Balancing Act:
Why is ESG so important to investors?
Nick McKeehan:
“ESG uses a set of factors to measure non-financial impacts. These are things that are not recorded in a balance sheet or income statement, or P&L, but they provide a connection between your business and the world you operate in… Your ESG reporting really provides better transparency and corporate disclosures, and companies that have these two programs, they really can help their investors and stakeholders better understand their business risks, and what opportunities they have related to social and environmental concerns.”
Balancing Act:
Can you implement just one of the “pillars” of ESG, and not the others?
Alyse Mauro Mason:
“It’s a great question and people want to do that, right. They go for that low hanging fruit of like ‘What can I do tomorrow?’ And, you know, what I like to tell companies is ESG really shouldn’t be an a-la-carte approach. You really should try to adopt holistically… Your ESG efforts at your organizations can start small, evolve, enhance. And partner with people that can help you get to where you want to go. Because it truly is a journey. And it’s ever evolving. And it is circular.”
Balancing Act:
Let’s focus on the social pillar for a moment. What role does DEI play in fulfilling the “S” in ESG?
Alyse Mauro Mason:
“Whether it’s diversity, DEI, DEIB, the key element there is inclusion, right? We want to make sure that our workforce is represented, they’re seen, and they’re accounted for. So the next part of that is, you know, human rights… Diversity is not only about the demographic percentages that reflect your workforce in visible diversity, which are usually reported as binary, right? White, non-white, male, female – we’re missing so many humans in that narrative by limiting it to those four areas. So, I would just want to encourage everybody to rethink how you’re talking about and reporting on your workforce diversity.”
Balancing Act:
How does employee well-being play a role in fulfilling the social pillar? Can you give us a concrete example of how a company is doing that?
Alyse Mauro Mason:
“Ecolab offers their workforce the Homethrive benefit at no cost to their employees as a high-touch family caregiving solution. This is important in the ESG context because Ecolab has placed a special emphasis on wellbeing initiatives. And by rolling out a family caregiving support benefit to their entire workforce, at no cost to them, they’ve seen the impact that investing in employee wellbeing has had on retention, productivity, and generally the overall health of their organization… And when it comes to wellbeing and workforce benefits, you know, try and provide that holistic offering to the best of your ability, of course. When the workforce feels supported by having the resources they need to excel at home and at work, they will thrive.”
Balancing Act:
If and when a company fulfills its ESG initiatives, what are some tips about reporting this to stakeholders and beyond?
Alyse Mauro Mason:
“You really want to stay true to your values, be transparent, and make sure that what you’re putting out externally is validated and audited, and that you can stand behind every metric that you put out externally. Because if not, you know, there’s different regulations that will be coming out, you know, sometime this Fall, that might relate to this… If it’s not newsworthy, and it’s not accurate, then don’t share it externally. Right? Not every part of your ESG program needs to be celebrated.”
To check out our full interview with Nick and Alyse from Protiviti, listen to our podcast episode here:
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