ESG Compliance Strategy Must Align With Regulation
Global companies are in various stages of developing programs focused on environmental, social, and governance compliance, while concerns in the US around ESG compliance are picking up as well.
Global companies are in various stages of developing programs focused on environmental, social, and governance compliance, while concerns in the US around ESG compliance are picking up as well. Though ESG legislation has yet to become commonplace, compliance officers are aware that their organizations face ethical, legal, and reputational risks relating to ESG factors. Global Organizational Priority In a recent survey of 600 compliance leaders across the UK, US, France, Germany, Asia, and Brazil, the vast majority of companies identified ESG risk management as a priority for their organizations.
Hogan Lovells' recent survey tracks the thinking of compliance professionals seeking to integrate ESG concerns into existing compliance programs, including challenges they face and areas of risk that need to be addressed. Our data shows that a deeper focus in the US on ESG compliance is already happening, but compliance officers face significant challenges embedding ESG concerns into existing programs. Third-Party Risks to ESG Compliance As compliance officers shift their focus to ESG, the risks posed by third parties should be at the forefront of companies' compliance strategies.
Strikingly, just 1% perceived third-party relationships as posing a great deal of ESG compliance risk to their businesses right now. Boost Compliance Through Existing Programs Companies have an opportunity to boost their ESG compliance by embedding their efforts into their existing anti-bribery and corruption compliance programs. According to respondents across regions, 74% cited the countries where they or third parties operate, and associated corruption risk, as a major concern with respect to ESG compliance. With increasing public pressure from internal and external stakeholders and regulatory risks increasing, organizations should examine business decisions through an ESG lens to reinforce the company's standards to proactively mitigate ESG risks.
Source : Bloomberg Law