Integrating ESG Factors

It is important to remain pragmatic when considering how to incorporate climate-change considerations and ESG factors into business strategy and risk-management activities. The climate issue is a highly sensitive one. Stakeholders want action and banks are feeling the pressure to respond. Rather than rushing their response, the best strategy is comprehensive, adequate preparation: a bank can create a value-focused road map setting out an agenda fitted to its circumstances and considering both the regulatory and physical status quo. Once the road map is enacted, banks should adopt a standardized approach to implementation by ensuring that investments are tied to areas of business value by meeting external expectations, facilitating finance, and offering downside protection.

Improving environmental, social, and governance (ESG) performance is a high-level expectation for businesses and their leaders in 2022 and into the future. CFOs should be carefully monitoring and responding to investor pressure for ESG outcomes going forward.

Environmental, social, and governance (ESG) factors and developing an ESG enterprise mindset has become a C-suite top priority. Adopting and using ESG factors and an ESG enterprise mindset requires a shift for business leaders. These business leaders increasingly recognize the importance of the social and environmental purpose of an organization’s brand, customers, stakeholders, and its own workforce.