Laura Tulchin is ESG Solutions Lead at Exiger. Her role involves ensuring that the company’s products and services provide comprehensive coverage of ESG risk. She tells Tom Fox that more and more companies are focusing on ESG as part of their mainstream risk management programs. She joins Tom in this episode of the ESG Report to talk about doing ESG right by managing risk and value generation.

Getting ESG Right

“Where we get ESG right, we have the potential to have decades of positive impact on the world around us,” Laura tells Tom. ESG is having a moment now, she says, so now is the time to take the steps necessary to move the industry forward. Getting that right will have a lasting impact. She and Tom discuss global and local advancements in ESG regulations. US regulators are getting serious about ESG, Laura says. She talks about the SEC Enforcement Task Force as well as the ESG Disclosure and Simplification Act. This demonstrates that regulators want companies to back up their ESG claims with real data. 

The Need for Standardization

There are multiple ESG reporting mechanisms existing today, Laura tells Tom. This causes fragmentation and is costly and ineffective. Also, she argues, it “allows companies to choose the reporting standard that might make them look the best from an ESG perspective.” For this reason, five of the leading standards setters have agreed to work together on a comprehensive standardized ESG reporting system. She acknowledges that no one system will perfectly cover every ESG situation, but standardization is an important first step. Tom asks why she thinks companies are pushing back against standardization. They’re mostly worried about the legal ramifications, she responds. “ESG is so impactful,” she remarks, “that if we don’t have a single benchmark it makes it really difficult for consumers, for investors, for risk managers, for compliance people to really understand ESG risks as well as the potential for ESG value generation.” Ultimately, ESG risk needs to be balanced with ESG performance to measure net impact, Laura says. That’s where the industry is going.

 

The G in ESG

Tom asks Laura to share her thoughts on the recent Exxon case. Should there be more focus on the G in ESG? “Good governance should ultimately lead to strong environmental practices and strong social engagement,” Laura agrees. The Exxon case demonstrates that going forward, companies need to engage shareholders and stakeholders, even though their views on ESG issues may be different. These changes are here to stay, she argues. Forward-thinking companies will try to understand ESG net impact and craft programs that respond to these types of actions.

 

Resources

Laura Tulchin on LinkedIn

Exiger on Website | LinkedIn