[Ed. note: In observance of Monday’s holiday, we will not be publishing a blog until next Tuesday.]
At PracticalESG, we work to maintain balance in ESG topical coverage. In the past few months there has been general waning coverage on and interest in social aspects under the umbrella of ESG. So much attention is being paid to climate matters at the moment I thought I was the only one feeling this way until this announcement from the European Commission (EC):
The European Economic and Social Committee (EESC) calls on the European Commission to publish an overdue report to consider extending the EU’s sustainability taxonomy’s scope to social objectives. In an own-initiative opinion approved in plenary, the EESC asks the Commission to describe the provisions that are required to extend the EU sustainability taxonomy’s scope to other sustainability objectives, such as social objectives. The Commission is mandated by the Taxonomy Regulation to publish a related report, but has so far failed to do so.
Even the EC fears that corporate attention to social risk assessment and management has fallen away. Then there is another matter of broadening “ESG” beyond what it should mean at a practical level – for instance by including cyber risk in the social element which is in our view a square peg in a round hole.
Is ESG really just “climate risk management”? One would be excused for thinking so based on media coverage and client alerts that have been issued recently. But social risk should not be pushed aside based on the ebb and flow of political pressure or volume of media coverage. The EC stated:
… it will be controversial to determine which economic activity should be considered as socially sustainable. But, this is exactly the reason why the definition process should be subject to democratic debate and decision making.
It can be tempting to grease the squeaky wheel and de-emphasize matters that are not continually “here and now” in the minds of executives. Especially when ESG budgets are threatened by economic uncertainty, ESG leaders should keep a balanced view of relevant topics and not lose sight of important issues just because they aren’t making headlines this week. Looking back and referring to ESG materiality assessments can be helpful in this regard as well as in communicating the importance of maintaining momentum on all topics.