We recently co-hosted a fascinating webinar with the Ethics and Compliance Initiative (ECI) to discuss the role of ethics and compliance (E&C) professionals when it comes to environmental, social, and governance (ESG) initiatives.
Our very own Tori Reichman, Chief Customer Officer at Vault Platform, spoke with special guest Lisa Schor Babin, Founder & Principal of Schor Ethics Consulting LLC, about the mounting pressure from investors, customers, and employees and the importance of ESG in today’s workplace. Here are some answers to the key questions that came up during the webinar.
1. How can E&C professionals identify ESG risks through data?
It’s important that organizations have the right technology in place to capture data. They can then connect the dots, identify patterns and prevent issues from becoming bigger. Lisa explained that E&C professionals can use all manner of systems to identify ESG risks, including misconduct reporting solutions like Vault Platform, risk assessments, employee surveys, and financial systems. The key is to bring together points of data that paint a picture and help to identify areas for improvement and risk areas.
2. How can E&C professionals demonstrate that ESG metrics are based on regulatory standards?
In December 2021, the EU Whistleblower Directive mandated that member states introduce common standards of protection for those who Speak Up about breaches of EU laws from retaliation or recrimination. By adopting a misconduct reporting solution that meets the criteria of the Directive, such as Vault Platform, companies with a presence in the EU can mitigate risks and take action when things don’t go to plan. Our solution reduces time to resolution and facilitates collaboration, creating a far more positive experience for everyone involved.
E&C professionals in the US should also consider leveraging the foundational elements from the Federal Sentencing Guidelines for Organization’s (FSGO) framework for an effective E&C program.
3. Is it possible to quantify the investment that is required in the ESG area?
Lisa flagged that an ESG strategy isn’t about politics; it’s about creating long-term value for a company and all of its employees, investors, and the wider community. A company’s strategy should therefore be tied to its mission and what it stands for and cares about rather than trying to measure ESG impact as a percentage of revenue or as a box that the company needs to tick. When thinking about your ESG strategy, consider what impact your organization is and could be having on the environment, community, and society and what you’re trying to achieve, as well as the risks your organization is facing.
4. How do prospective employees discover ESG information about the organizations they’re thinking of joining?
One topic discussed at length during the webinar was the importance of trust between an employer and its employees. Organizations need to demonstrate to existing and prospective employees that their trust is important to the organization through its actions and investment.
For public companies, ESG results will form part of their annual reports and perhaps feature on their public-facing websites. Many organizations may also release separate ESG reports. The level of detail will likely vary depending on the ESG program’s maturity and impact.
5. Can ethics and compliance professionals work independently?
Typically, E&C professionals are hired internally to drive company ethics and compliance from the inside or as specialist consultants brought in to focus on key tasks and objectives.
Regardless of whether E&C professionals are hired internally or as consultants, they won’t be successful working in silos. From collaborating with misconduct reporters, team leads, the communications team, and other case managers, as well as agreeing on objectives and reporting results to leadership and the Board, collaboration is core to the E&C professional’s function and success.
Vault Platform unlocks ESG reporting from the grassroots. Keen to know how we can help your organization become an ESG Enabler and advocate for change? Book a demo today.