At the bottom of this post I have included a link to an article in Forbes that I find worthwhile for beginning the steps toward your design and implementation of ESG.
One of the current difficulties with starting to design and implement ESG for your organization is that there continues to be no single definition or list of criteria for exactly what ESG is, and, thus, what is included in ESG. Perhaps related, but really a different issue, is that there is no agreed upon standard or process for how to audit or even evaluate ESG from one organization to the next. For example, the following are some of the various standards that have been developed for ESG standards and evaluating ESG, and which contain their various respective criteria and components including for example SASB (Sustainability Accounting Standards Board), GRI (Global Reporting Initiative), UN SDGs (UN Sustainable Development Goals), MSCI, ISS ESG, and Sustainalytics (Morningstar), to name some.
However, stepping back a few steps from the above paragraph, it can also be argued that the lack of one or two definitive standards might also be a benefit for the majority of organizations that want to start designing and implementing their ESG. I say that because while a significant focus has been directed toward ESG in public companies and possible required regulations, all of which takes time and has taken time and regulations and legal requirements whatever they are and whatever they might become will in any event be a progression of starts and stops, the fact is that the great, great majority of organizations are nonpublic, nonprofit and governmental to which legal requirements for public companies will not apply, or only might at some point become relevant but typically not in a legal required sense.
There is in fact no obstruction to any organization, whether public, nonpublic, nonprofit or governmental, designing, implementing, and even reporting ESG. That having been said, however, depending on the type of organization “reporting” and what the organization says or represents about its ESG will require consideration from a legal perspective, but that also is true about everything that the organization reports or says or represents about its operations, policies, conduct, governance, etc.
I have written about ESG several times (including six posts in 2019 and 2020 in which ESG is part of the title), see for example NASDAQ snapshot https://wp.me/p75iWX-jw, SEC Commissioner comments https://wp.me/p75iWX-gH, CAQ calls for ESG standards https://wp.me/p75iWX-xH, from Protiviti https://wp.me/p75iWX-qU, and What if California Government, Nonprofits and Education are Leaders https://wp.me/p75iWX-hi.
Looking more at specific design and implementation of ESG, the following is a link to an article in Forbes that I find worthwhile for beginning the steps toward your design and implementation of ESG: “How to Operationalize ESG” https://www.forbes.com/sites/betsyatkins/2020/05/08/how-to-operationalize-esg/?sh=601883294835. One of the points is that the organization has the ability, and even for public companies at least in part the ability, to design and implement its own ESG and can start small, limited or specifically focused and can then grow from there, keeping in mind, of course, that what the organization reports or says or represents about its ESG will require consideration from a legal perspective.
Best to you. David Tate, Esq.
Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.
Thank you for reading this post. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.
Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only
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