Countries around the world have been backing up their sustainability commitments by establishing policies and regulations surrounding ESG disclosure requirements. New Zealand was the first out of the gate to do so, but many countries have since followed suit, and now tales of enforcement are starting to garner headlines.
This past May, the United States Securities and Exchange Commission (SEC) initiated its first ESG-related enforcement action against a public mining company related to misstating and omitting information about ESG investment considerations. At the basis of the allegations is that the company manipulated dam safety audits and documents in their ESG disclosure reporting, which ultimately misled stakeholders, including local governments, communities and investors, about the safety of the dam. The SEC also communicated that it would continue to investigate greenwashing and issue fines as applicable.
This example serves as a harbinger to organizations and EHS practitioners alike that regulatory scrutiny is already here, and more formal regulations are sure to follow.
This growing anticipation of increasing compliance obligations is also noted in Intelex’s latest research into what is keeping EHS and ESG professionals up at night. One preview from this upcoming research report is that 78 percent of respondents indicated that keeping up with burgeoning compliance requirements is becoming more of an issue in their day-to-day lives. This data point underpins what everyone already knows: ESG management is here to stay and it will impact a company’s EHS mandate.
While it is still impossible to know the extent of the impact this will have on the practice of EHS, there are a few possibilities. Some organizations will simply add ESG reporting responsibilities to the EHS function. Others might create a single entity dedicated to ESG reporting and performance improvement, while still others could create a hybrid organization that encompasses both practices.
Despite the organizational structure flux, EHS professionals will be major players in ESG management for most organizations. Since a majority of the data needed for ESG reporting resides under their management, they will need a solid understanding of ESG to anticipate what else may be asked of them beyond simply the provisioning of data, especially when increased regulations are looming. EHS professionals are familiar with the reality of changing regulatory landscapes, so they are turning to a tried-and-true strategy as their first line of defense against an unknown future: knowledge acquisition.
Intelex is therefore excited to announce the launch of its ESG Fundamentals online training course, the first of a three-part learning series on ESG. It provides an introduction to ESG, the concepts and vocabulary ESG uses, the different practice areas that contribute to ESG and a look at how ESG is different from earlier approaches like Corporate Social Responsibility (CSR). It serves as a great introduction for EHS professionals who are new to the world of ESG, but it is also an excellent primer for more experience practitioners who want to fill in any knowledge gaps they’ve encountered in their approach to ESG.
If you want to do some preparatory work before you begin the training, our Insight Report What Every EHS Practitioner Should Know About ESG looks at the overlap between EHS and ESG, as well as the role EHS practitioners can play in creating an effective ESG program.