I recently blogged about how ESG staff and advisors are putting investor priorities over those of their own company. This LinkedIn post from Nawar Alsaadi about a new annual survey from Workiva of ESG practitioners highlights additional areas of misalignment – and its implications:
“Executives are far more comfortable with the quality and suitability of processes associated with their companies ESG initiatives than those closer to these initiatives. This divergence in views comes across clearly in my conversations around sustainability topics with ESG practitioners of varying seniority.
This perception disconnect has multiple reasons ranging from willful executive ignorance as to the complexities of ESG assessments and reporting to simple lack of qualifications to understand what these ESG processes actually require. I would argue this discrepancy between executives and managers is one of the key reasons for the chronic under allocation of resources to ESG teams across companies and industries.”
Nawar is absolutely correct in his point about allocation of resources. ESG/sustainability (the concept and staff members) are at risk if they can’t communicate appropriately to executives. NYU Stern professor and Workiva advisory board member Tensie Whelan gave additional detail:
“62% of executives strongly agree their companies apply the same diligence to ESG reporting as they do to financial reporting. Just 32% of managers say the same.”
That is a big gap. If executives realize they are signing public or regulatory ESG disclosures based on procedures and controls that don’t meet their expectations… well, I don’t want to be in the room when those conversations happen. We have several resources on PracticalESG related to validating ESG data and ESG disclosure controls. If you aren’t a PracticalESG.com member with access to these resources, sign up now and take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member, you may cancel for any reason and receive a full refund.
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