The vast body of environmental, social, and governance (ESG) knowledge is difficult for corporate executives to frame into initiatives and assignments. Early steps of establishing an environmental, social, and governance framework include assigning an executive to lead the efforts, developing a management committee charter to ensure ESG programs receive corporate governance and approved resources, and publishing an initial policy and corporate mission statement for both internal and external constituents.
The next step in the ESG journey starts with an assessment of current practices and risks. We believe most modern organizations have a baseline of sustainability within existing policies and practices, but they are not always linked to global ESG programs and sustainability standards. What is our climate-related risk, how do our current sustainability practices align with ESG program guidelines, and what is our current carbon footprint and target date for carbon neutrality?
Before frameworks are selected, before staff is hired, and before public disclosures are made, we believe the following three projects build the foundation for the rest of an organization’s ESG framework.
Climate Risk Vulnerability Assessment
The perspective that businesses are immune to climate issues in low-risk flood zones is over. Climate risk can come in the form of acute physical threats like storms and floods, but there are many chronic physical threats (e.g., rising sea levels and flooded farmland) and transitional threats (e.g., public opinion and greenhouse gas [GHG] reduction costs) that may threaten your organization’s continuity or render physical assets worthless and impair financial asset values. Awareness of the specific climate-related risks to your organization is the first step to knowing where to apply resources and identify key risk indicators to monitor whether your organization is staying safe and where it is vulnerable to emerging threats. Performing a climate risk vulnerability assessment is the first step to keeping your organization safe from climate-based threats and is a fundamental element of climate change awareness and mitigating the indirect effects caused by the market’s response to variability.
ESG Sustainability Assessment
Now more than ever, boards, investors, customers, and other stakeholders are asking for transparency about the sustainability of partnered organizations. Responding to (or staying ahead of) the demands of your stakeholders by analyzing your organization’s practices and initiatives against the vast library of ESG topics is a necessity. Upon completion of our sustainability assessment engagement, you will more substantively understand the strengths and weaknesses of your organization’s ESG footprint and be positioned to decide which sustainable business practices are important to your stakeholders. Targeted action plans can be implemented during the process.
Leadership as well as community and consumer stakeholders recognize their responsibility in operating more environmentally conscious businesses. Leadership is ready to support strategic initiatives around measuring and reducing carbon emissions, but currently, no clear project path has been convincing. The path to reducing an entity’s GHG emissions starts with the measuring the current carbon output from business activities. You can’t take meaningful action on reducing GHG emission and your carbon footprint unless you first measure the current state. Allow Wolf to support your carbon footprint measurement.
Wolf & Company, P.C. is a Top 100 CPA and business consulting firm serving its clients with an industry-focused team structure. Engage Wolf’s ESG and climate risk professionals to support the kickstart of your business’s ESG journey. We will provide innovative solutions and guidance based on globally accepted ESG frameworks and access to experts who understand the unique aspects of your industries.