Tag: ESG

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
 
 

 
Lawrence Heim, the editor of PracticalESG.com, has been working in environmental sustainability for over 30 years, moving from one area of the industry to another and developing a deep knowledge of the space. PracticalESG.com is designed to help professionals approach program development, program implementation and disclosure, as well as understanding the basics from a practical point of view. He and Tom discuss how legal work led to a passion for ESG, and the HBR paper that changed his whole way of thinking. (Green and Competitive) It was in the late 80’s and early 90’s that meaningful linkages between environmental management and business value started to be made, and that is where today’s guest found his stride in the industry.
 

 
A Risk Management Focus
Tom asked how Lawrence’s experience has helped him create a risk management focus on ESG. Lawrence explains how he didn’t know a thing about what risk management really was. Even today, he is of the opinion that most people don’t really understand what risk is. It’s critical that ESG professionals discuss and work alongside traditional risk management folks, or different terms, definitions, and benchmarks are going to be in play, which is really ESG shooting itself in the foot in terms of credibility.
Changes over the Pandemic
Tom points out that the pandemic has really focused attention on supply chains and procurement, and the importance of responsible sourcing. Lawrence explains how this has been an evolution over time, starting in the garment and textile sectors, and how public as well as corporate awareness started to shift the needle. The Rana Plaza incident, and the rulings around conflict minerals have really advanced the conversation. They also discuss what changes have happened internally in organizations over the pandemic – particularly the impact on how companies are treating employees.
Too Much Information
Getting started in ESG can be overwhelming because there is a huge amount of information, much of it conflicting. Lawrence recommends that people just begin reading and learning, but remaining skeptical, and being on the lookout for contradictory information. Learning which sources you can trust, and which have the best reputation takes time, but if you start broad, and remain skeptical, you will start to gain a full understanding.
Long Term ESG Strategy
Lawrence gives his thoughts and predictions about what the coming years will mean for ESG – he posits that ESG is going to become fully integrated in organizations, rather than a standalone issue. He further posits that if companies aren’t considering water use and availability now, they should be.
Resources
Lawrence Heim: LinkedIn | PracticalESG.Com | Lheim@Ccorp.com 
Green and Competitive – HBR Article
Killing Sustainability
 
 

 
Introducing The ESG Report with Tom Fox 
ESG has exploded into compliance and business consciousness in 2021, so as a compliance industry professional, you need to be up to date. To open up the show, Tom Fox is speaking with Trysha Daskam, the Head of ESG Strategy at Silver, a premier provider of regulatory compliance, ESG and due diligence advisory services to the investment management industry. She and Tom are talking about regulatory shifts, the G7, trends in reporting and key risk areas.
 

 
Trends and Shifts at Home and Abroad
Trysha talks about how ESG stakeholders in the states have been paying close attention to what is happening in the EU, and specifically regulations that are coming out of the European Commission. She talks about what they mean for American companies and other entities. Investors are very interested in the indirect impacts from what is happening across the pond. She goes on to talk about the first ESG alert that is identifying the riskiest practices in the space.  
The G7 Summit
The early focus of ESG was on the link between environmental and investment risk, but it is much broader now. Tom and Trysha discuss the climate conversation, the focus of the Biden administration, and the different governmental and other bodies involved in it.  Of particular interest is the strong stance the G7 leaders took on the Task Force on Climate Related Financial Disclosure. 
The Business Case for ESG Analysis
Tom and Trysha talk about the portfolio of ESG risks, and how there was a shift from looking at it as primarily environmental to a much broader spectrum of risk. There are hundreds of factors that fall under the ESG profile, and investment managers are looking at them to fully understand the benefits and risks of different opportunities. A strong focus on governance has been a hallmark of being a manager to other people’s assets. Trysha shares an example about Exxon Mobile, and their lack of transparency about risk in the Gulf Coast. 
Resources:
Silver Regulatory Associates
How EU Climate Regulations May Affect US Private Fund Managers