Tag: ESG

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The ESG Report

Corporate Culture and ESG with Ty Francis

 

Tom Fox welcomes renowned compliance leader, Ty Francis, to the ESG Report! Ty is the Chief Advisory Officer at LRN; he leads the company’s worldwide ethics and compliance consulting, ESG, and community outreach strategy. In this week’s episode, Ty and Tom discuss LRN’s new report, Assessing Corporate Culture, and how it relates to ESG. 

 

 

The Genesis of the Assessing Corporate Culture Report

Tom asks Ty about the genesis of the LRN report. This is the second report LRN produced; the first one was about activating culture and ethics in the boardroom. Their previous research led the team at LRN to realize that most corporate boards did not understand culture. Ty says, “Over the last 10 years culture is so high on those lists, but when you look further into the survey and ask them what they’ve done to measure this culture, it’s nonexistent.” Therefore, LRN sought to discover the general opinion on culture and ethics compliance and provide a roadmap on how to activate these skills within a company. 

 

Roadmap for Building Corporate Culture

Tom highlights how the report can be used as a roadmap to build culture. Ty says that building corporate culture starts with defining ethical culture. Ethical culture is the codification of what an organization stands for and the systems that support those beliefs; the core architecture should be reinforced by leadership in how they model desired behavior. The second step in building culture is getting to know the most valuable members within your company, in each department. Culture is extremely important for building relationships within a company and allowing people to hear opinions from all sides. 

 

The Relationship Between ESG and Corporate Culture

The culture within a corporate setting has always been an ESG issue. The governance aspect of ESG is directly related to culture as it is something that companies should have been implementing for years. Ty remarks, “It shows the company’s values across the board, and I think when you have a mismatch of what the company says it’s doing and what they are really doing, that can fragment any ability for a company to demonstrate that it is really a forward-thinking, future-expanding company.” The governance is to be upheld by the board, stewards, stakeholders, and managers. He lists five key considerations for boards: 

  • prioritizing culture on the board agenda, 
  • challenging the board’s culture, 
  • mentoring and monitoring, 
  • articulating the desired culture, and 
  • establishing clear communication.

 

Looking Ahead

Acknowledging the new legal and regulatory requirements, public pressure and the evolution of thinking surrounding corporate culture, Tom asks Ty if he believes that boards will maintain the corporate culture into 2025 and beyond. Ty believes these pressures will force boards to manage and maintain the corporate culture. 

 

Resources

Ty Francis | LinkedIn | Twitter

LRN | LRN Report – Assessing Corporate Culture | LinkedIn | Twitter | LRN Report – Benchmark of Ethical Culture |

 

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The ESG Report

ESG in Business – Principles + Purpose with Raj Arora

 

Tom Fox welcomes Raj Arora to the ESG Report. Raj is the CEO of Jensen Hughes, deemed the global leader in safety, security, risk-based engineering, technology, and consulting. It is primarily known for its innovative work in fire protection and engineering. In this week’s show, Raj and Tom discuss the firm, his professional background, and how it relates to ESG.

 

 

Risk-Based Engineering

Tom asks Raj to define risk-based engineering. “Risk-based engineering and consulting are all the facets of trying to assess the risk, to ensure that the probabilities and the consequences are limited for our clients,” Raj responds. They help clients prepare for emergencies, mitigate losses and respond and recover from those accidents quickly. They assess emergency management situations through risk frameworks and use the popular method of probabilistic risk assessment. 

 

Principles + Purpose with Jensen Hughes

Tom asks Raj to explain how Jensen Hughes put their Principle + Purpose strategy into practice. “Our purpose is to make our world safe, secure, and resilient,” Raj remarks, “and we have principles that we lead the company by and live by every day and that is our clients, our industry, and our performance.” A successful business needs to have a purpose and a drive for what you’re doing and who you’re doing it for. Your main priority should be being “good partners and understanding your clients objective.” You must also be performance-oriented and focused on business growth “which helps advance the purpose of the firm.” 

 

ESG and the Engineering Industry

Tom asks Raj what role an engineering firm like Jensen Hughes plays in ESG. He responds that Jensen Hughes believes that they must help achieve their ESG goals, as their mission is “making the world safe, secure, and resilient”. Most engineering firms are all about focusing on the environmental aspect of ESG, by reducing their carbon footprint, decarbonization, and environmental stewardship. Jensen Hughes also helps their clients follow ESG regulations by “helping manage wildfires, risk-based engineering, new energy storage solutions and safely advancing carbon-free energy.” 

 

Resources 

Raj Arora | LinkedIn | Twitter 

Jensen Hughes | Website | LinkedIn

 

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The ESG Report

The Role of Digital Accessibility in ESG with Tim Springer


 
Tom Fox welcomes Tim Springer to the ESG Report. Tim is CEO and founder of Level Access, a digital accessibility company that provides technology accessibility compliance solutions for corporations, government agencies, and leading educational institutions. In this week’s show, he and Tom discuss the role digital accessibility plays in ESG.
 

 
Level Access’s Niche in the Market
Tom asks Tim what led him to found Level Access. Tim explains that he and his colleagues first created a website to make finding wheelchair-accessible museums in Europe easy and convenient, but that idea was not successful. They did find that digital accessibility was a fruitful idea so they decided to make all websites user accessible. Level Access was born from this. It evolved into digital accessibility and enforcement.
 
What is Digital Accessibility?
Tom asks Tim to define digital accessibility. Digital accessibility refers to how usable all possible users – regardless of their ability or disability – find a website, app, or other digital experience. Tim explains, “When you build a digital asset there are rules that you can follow to ensure that it’s usable to people with disabilities, and if you don’t follow those rules it will not be usable to people with disabilities, and you will often face legal liability associated with that.” He adds that this is a lucrative field because in recent years, ESG evangelists have been promoting inclusivity and equity. “Organizations would want to be seen implementing accessibility because it allows them to tell a good equity story,” he points out.
 
The Relationship Between ESG and Digital Accessibility 
Tom asks Tim how he sees digital accessibility as it relates to ESG. Tim replies that a major component of ESG is diversity and inclusion, and the public is demanding companies to answer these questions: ‘Do you have a diverse population?’ and ‘Are you providing equivalent access for everyone in your organization?’ This is where the social aspect of ESG plays in. Additionally, due to a recent executive order from the Biden administration, accessibility will be added to the ESG trifecta of diversity, equity, and inclusion. 
 
Looking Ahead
Tom asks Tim where he sees digital accessibility in 2025 from the corporate perspective. Digital accessibility will move beyond simply a regulatory response to a more far-reaching answer. Tim expects that by 2025, digital accessibility will be one of the three core digital governance activities that organizations follow – digital security, digital privacy, and digital accessibility.
 
Resources
Tim Springer | LinkedIn | Twitter
Level Access
 

Categories
The ESG Report

​​Aligning Values with Capital for Purpose with Bill Davis


 
Bill Davis is the founder and Portfolio Manager of Stance Capital. This company mitigates material ESG risks, produces excess returns, and is dedicated to ensuring that public equity portfolios can align with capital and personal values, without sacrificing performance. Tom Fox welcomes him to this week’s show to talk about Stance Capital, how it helps its clients, and greenwashing. 
 

 
Greenwashing
Tom asks Bill to define greenwashing and explain why it is a major problem in ESG. According to Bill, greenwashing is when companies make promises to preserve the environment which are not actually true. Greenwashing is “a marketing claim that does not back up reality,” he tells Tom. It’s an important issue in ESG because we expect companies to be socially responsible. “There is an ethical partnership that goes beyond the basic contract and when it isn’t done it adds a level of frustration,” Bill remarks. Tom comments that he started to seriously think about the environmental aspect of ESG when he looked at his children and thought about what kind of world they were inheriting. He talks about the importance of sustainability and the “very real threat posed by climate risk”, and urges major companies to act quickly to reverse the effects of climate change. 
 
Chasing Shiny Objects
Bill believes that the surge in greenwashing today stems from the large number of companies who want to brand themselves as environmentally friendly without adequate preparation. He says, “I think it’s really just chasing shiny objects; I think lots of firms rush to the market with a product because they see that it is in demand – however, they don’t understand the product.” However, there is an even more dangerous issue of greenwashing: some companies blatantly mislead the industry or investors by marketing their product as fossil-free, although it contains fossil fuels. 
 
ESG in Russia
Tom and Bill discuss how the Russian invasion of Ukraine impacts ESG and how it ties into greenwashing. Bill points out that it’s difficult to discuss only the environmental aspect as Russia also has numerous social and governance issues. He notes that several companies that claim to be environmentally conscious and pro-ESG, do work with other businesses that have worked intimately with Russia over the years. He believes that this is the fault of ESG rating data. “They’re not doing a full job and understanding what they’re buying. And secondly, I think it’s part of the nature of the world – as things are happening so quickly – that sometimes it’s difficult to think of everything in advance.” As an ESG data analyst or fund manager, you should take current events into account so that when the next event happens you can respond more nimbly. 
 
Resources
Bill Davis | LinkedIn | Twitter 
Stance Capital 
 

Categories
The ESG Report

Safety as the ‘S’ in ESG with Elizabeth Crow


 
Elizabeth Crow is the CEO of OnPoint Industrial Services, a company that services every aspect of your industrial project, ensuring its smooth execution and the safety of your workers. Tom Fox welcomes her to this week’s show to talk about OnPoint’s work, how it helps people, and the future of safety within ESG. 
 

 
How OnPoint Manages Turnarounds
Tom asks Elizabeth to define turnarounds and how OnPoint facilitates them. A turnaround is a concentrated maintenance event where activities that cannot be conducted while the facility is online, such as cleaning, inspection, and repairs maintenance, are undertaken. A turnaround takes up to 6 weeks and thousands of people come on-site to do the work. Elizabeth describes OnPoint as a turnaround support services provider. She says, “The biggest part of OnPoint’s business is around safety, providing permits, providing safety attendants…. everything except the work itself is what OnPoint does.” 
 
The Relationship Between ESG and OnPoint
Tom asks how ESG has affected a company like OnPoint. Elizabeth explains that since ESG has become more popular, the private equity firm that owns them, Cap Street, has been focused on instilling ESG priorities into the portfolio companies they manage. However, due to the nature of the services OnPoint provides, it is difficult to focus on ESG in its entirety. Their work tends to focus more on the social and on the governance components of ESG than on the environmental component. “By the nature of what we do we can’t impact the environmental footprint,” she remarks. She explains that they are concentrating on ensuring the safety of the workforce and maintaining their safety standards and compliance.
 
Safety Requirements During Turnarounds 
Safety has always been a key component of ESG. Elizabeth believes that it has been pivotal to OnPoint’s success, since the increased emphasis on safety means companies recognize the value of having a professional safety provider. While some companies that are conducting the turnaround will hire anyone to ensure safety, Elizabeth tells Tom, “we [at OnPoint] train [people] to a specific standard and when we send somebody out, it’s treated as a professional service so you get a much higher quality from that.” This work aligns with the social aspect of ESG, caring for their rights.
 
Looking Ahead
Elizabeth believes that in the future more customers and stakeholders will be interested in more aspects of ESG, as the world is progressing in a direction to create safer work environments. Additionally, with the increasing threat of global warming more industrial companies will focus on the environmental aspect of ESG.
 
Resources
Elizabeth Crow | OnPoint Industrial Services
 

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Never the Same

ESG Will Never Be the Same

After the Russian invasion of Ukraine, the business world will never be the same again. Deputy Attorney General Lisa Monaco recently said that the world’s “geopolitical landscape is more challenging and complex than ever. The most prominent example is, of course, Russia’s invasion of Ukraine.” It is “nothing less than a fundamental challenge to international norms, sovereignty and the rule of law that underpins our society.” This is even more so in the current business climate. Over this five-part podcast series, I will consider how the business will never again be the same and how a confluence of events has changed business forever. I am joined in this exploration by Brandon Daniels, CEO of Exiger. We will explore the irrevocable changes in Supply Chain, trade and economic sanctions, anti-corruption, cyber-security and ESG. In this concluding Part 5, we look at perhaps the business area with the greatest changes from the Russian invasion, ESG. Highlights include:

·      Why ESG will never be the same.

·      Companies must have a holistic approach to ESG.

·      Reputational damage as a top-line expense.

·      ESG must be managed proactively.

·      Does your corporate ethical values stand for freedom and democracy or something less.

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Blog

Why ESG Will Never Be the Same After the Russian Invasion

After the Russian invasion of Ukraine, the world of business will never be the same again. Deputy Attorney General (DAG) Lisa Monaco recently said that the world’s “geopolitical landscape is more challenging and complex than ever. The most prominent example is of course Russia’s invasion of Ukraine.” It is “nothing less than a fundamental challenge to international norms, sovereignty and the rule of law that underpins our society.” This is even more so in the current business climate.
Over this five-part series, I have considered how business will never again be the same and how a confluence of events has changed business forever. I have been joined in this exploration by Brandon Daniels, Chief Executive Officer (CEO) of Exiger. We have explored the irrevocable changes in Supply Chain, trade and economic sanctions, anti-corruption, cyber-security and environmental, social and governance (ESG). In our concluding Part 5, we consider why ESG will never be the same after the Russian invasion of Ukraine.
The pandemic led to an explosion of ESG awareness and forward movement. This was driven much more by the business world, from institutional investors, to shareholders, employees, and other stakeholders to financial institutions and even insurers, rather than through regulatory change. They are all now evaluating business prospects, targets and partners through an ESG lens. Many businesses have responded by upping their ESG game through sustainability officers, more robust ESG programs and similar efforts. However, these efforts were in many ways siloed within the three broad categories of ‘E’; ‘S’; and ‘G’. What the Russian invasion of Ukraine drove home was the need for a more holistic approach to corporate ESG.
ESG is now a key national security interest of democracy. The transparency mandated by ESG programs, through government required disclosure or private sector required disclosure also ties into the other areas of business change we have explored over this series. Obviously, the disruption in the supply chain of key minerals coming out of Russia, such as aluminum or fossil fuel, is an important issue but companies which tried to continue to use those resources faced a much greater risk and economic sanctions; that being reputational risk. Daniels remarks, “in terms of social issues, companies were forced to comply with sanctions, but then there were boycotts against companies that maintained relationships with the Russian autocracy. There were boycotts against companies that had ties to Russian oligarchs.”
It is this impact on reputational damage which has changed ESG going forward. Regulators can certainly levy and assess fines based upon violations of laws and regulations. For many businesses, however, this is simply seen as a cost of doing business, a below the line cost such as a corporate legal department of compliance function. However, hits to reputational damage are above the line costs meaning they eat directly into sales, revenue, and success. Moreover, your market cap and the valuation of your business are both based on revenue so any hit to your top line could significantly impact your organization in a very negative manner. If your organization is seen as supporting autocratic regimes who nakedly wage wars against women and children or your company purchases goods which were made by Uyghur slave labor; a very large swath of the consuming public will not want to purchase your products or even do business with you. The risk is simply too high.
This has led Daniels to reflect that consumers want to purchase and transact with purpose driven businesses. He said, “What is more purpose driven than supporting democracy and supporting the arrest, the fight against a brutal regime that is quite literally killing innocent women and children. This is not a question of risk management or risk appetite. This is a question of deciding whether or not you as a brand can stand for the ideals of freedom and the ideals that we have for an inclusive and fair and open and democratic world. When we talk about purpose driven, we have to remember that what people are demanding, is a company that aligns with their values, aligns with their ethics.”
All of these factors will change ESG forever and how companies’ approach ESG. Your organization must not only more fully integrate ESG into the overall business strategy, but your organization must integrate the ‘E’, the ‘S’ and the ‘G’ through a cohesive approach to all three all the way up to the Board level. Daniels noted that many companies were caught “flat-footed” by the Russian invasion of Ukraine. Looking across the three pillars of ESG, the Russian invasion of Ukraine forced companies to take ESG more seriously. Daniels said, “it codified and solidified in people’s minds, the need to manage ESG as a part of reputational brand value. You have to look at ESG proactively because trying to react to these situations causes so much turmoil.”

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Daily Compliance News

June 21, 2022 the Red Flags for Forced Labor Edition


In today’s edition of Daily Compliance News:

  • Red Flags for forced labor in China battery-making supply chain. (NYT)
  • Will corruption prevent Ukraine from joining the EU? (NYT)
  • What are Scope 4 emissions? (Bloomberg)
  • Uyghur Forced Labor Prevention Act (UFLPA) is poised to go live. (BBC)
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The ESG Report

The Legal Side of ESG with Christian Perez Font


 
Christian Perez Font has appeared on many of Tom Fox’s podcasts. He is the managing partner of Thinkeen Legal, a revolutionary law firm that specializes in corporate and commercial law, domestic and cross-border transactions, and compliance with a focus on startups, and small and mid-sized companies. He specializes in using data to help clients do traditional legal tasks. Thinkeen Legal’s main focus is the healthcare industry. In this episode, Christian and Tom discuss organizations’ legal approach to ESG. 
 

 
Compliance Through The ESG Lens
Tom asks Christian how he approaches M&A and compliance from an ESG perspective. Christian responds that when he looks at data and legal projects, he thinks about the data from two perspectives. “First you need to think of data as fuel because it’s what keeps your compliance cycle going on, your business cycle going on; but also as a measure of progress towards a certain goal.” The same goes for a company’s ESG program, he says. He explains that it is crucial to have fixed goals for each part of your ESG program as well as a way to measure your progress toward those goals. In an ESG program, you may have to analyze large sums of data in some cases, and in other cases the data may be very limited. He tells Tom, “When we talk about data in the governance side of things, you’re probably going to have fewer amounts of data to track than if you’re thinking about social responsibility.” 
 
The Nexus Between Healthcare Compliance and ESG
Thinkeen Legal is known for its work in the healthcare compliance industry, so Tom asks how data, healthcare, compliance, and ESG intersect. Christian explains that there’s a big intersection of ESG and compliance on the social responsibility side and governance sides.  He remarks, “When looking at acquisition as an investor, one of the things you want to look at is the social responsibility program to know if this is the company you want to invest in from a corruption standpoint… In the healthcare sector, we’ve seen some companies use social responsibility initiatives for improper purposes.” Therefore, he advises that good asset management – which is a part of a governance system – can provide you with useful information from a compliance perspective about what is happening in relation to ESG in the company. 
 
ESG and Data Analytics 
Tom asks Christian about the importance of ESG audits and the importance of the data you collect. Christian replies that auditors play a crucial role in data tacking by having to intimately understand the trends the company is tracing. “Data analytics and tracking play a major role in business acquisitions,” he points out. “Know as much as you can about the other. Understand the company’s ESG program and have a clear grasp of its social responsibility and environmental footprint.”
 
Resources 
Christian Perez Font | LinkedIn | Twitter 
Thinkeen Legal | Twitter | Instagram  
 

Categories
Innovation in Compliance

Compliance Insights from Traliant: Episode 3-Maggie Smith with a Spotlight on DEI


Welcome to a special five-part podcast series on compliance insights, sponsored by Traliant. Over this series, we will discuss key issues that Traliant is helping to lead and define the online training industry going forward. Over this five-part series, I will visit with  John Arendes, CEO of the company, on what is new at New Traliant and what the DOJ has communicated to the compliance community regarding its expectations around online training and communications; Maggie Smith, Vice President of Human Resources at Traliant on the role of DEI in your corporate ESG program; and Scott Schneider, Head of Content Development at Traliant on your Code of Conduct and anti-corruption training. In this episode 3, I visit with Maggie Smith, VP for Human Resources at Traliant and we discuss the intersection of diversity equity inclusion  and compliance. Highlights include:

  • DEI is much more than anti-discrimination/anti-harassment.
  • How do you bring in inclusion to an organization and why is it so important?
  • It’s all about trust to drive a speak-up culture.
  • The role of DEI in ESG.

Resources
Traliant Website
Maggie Smith on LinkedIn