Trysha Daskam has been with Silver Regulatory Services since its inception 18 months ago. She is the in-house expert on Environmental Social Governance (ESG) at Silver and was brought in by founder Fizza Khan (guest on episode 108 of this podcast) to grow the ESG arm of the business. She chats with Tom Fox about how Silver Regulatory Associates helps their clients improve their ESG compliance.
Creating an ESG Program
Trysha defines ESG as a lens through which you comprehensively evaluate the investments that you make. It is often deemed a risk tool because it evaluates a set of environmental, social and governance risk factors that were not typically captured in traditional diligence. Tom asks Trysha to describe the steps a company should take to create an internal ESG program. She responds that companies should start by determining if they already have any ESG-related document that could form the basis of a policy. If not, then there are a few core steps to take:
- Create your guidance document that enumerates your ESG procedures;
- Train the investment personnel who will be responsible for the policy;
- Entrench the policy in the company culture through communication.
How ESG Helps You See In The Dark
ESG is increasingly becoming a matter of corporate citizenship, Trysha says. It is a way for a firm to establish how it is acting responsibly towards its clients, employees and community at large. In addition, investors want to see that the ESG policies on paper are actually being implemented, that protective mechanisms were put in place to guard against considered risks. ESG should put a firm in a place where they are less surprised by things that happen, Trysha remarks; it’s another tool to help them see in the dark. Tom comments that it’s a framework to be able to not only analyze questions and manage risks, but also to give answers to multiple stakeholders.
ESG for Investment Firms
Tom asks where an investment firm should start if they want to evaluate their portfolio or potential acquisitions from an ESG perspective. Trysha responds with some questions they should ask:
- What do you deem to be a material ESG risk for the business that you are evaluating?
- From that list, are there any underlying sub factors that can be measured?