Checking Your ESG Blind Spots under the ‘Duty of Care’

We can no longer deny it: no matter the industry, each company faces a wide range of environmental, social and governance (ESG) risks found both within the business operations and throughout the value chain that need to be identified, monitored and managed. Although the benefits of good ESG risk management seem obvious, there are still companies claiming that some of the most important ESG risks such as human rights or climate change do not concern them. What European lawmakers have shown in 2018 through the EU Non-Financial Reporting Directive and the French “Duty of Care” law is that ESG risks affect all companies, albeit to a varying degree. In all cases, it is necessary for them to broaden the scope of ESG risks to avoid potential blind spots, and to be transparent towards stakeholders on the risks that are most prevalent.

Put Your Mouth Where Your Shareholder’s Money Is

As a growing share of a company’s value is locked into intangible assets, investors are making more and more use of extra-financial indicators to determine a company’s health and investment potential. However, only few CEOs are being evaluated on this type of metrics when it comes to their annual performance reviews.