ESG training – become a leader in environmental, social and governance

The Corporate Governance Institute has created, along with leading, global ESG experts and partners, the first self-paced, fully online certificate in ESG.

This certificate was created and developed by directors for directors. Click here to learn more about the first ESG for Directors certification and download the course brochure.

You can now become the champion in your organisation who brings practical ESG insight to address the environmental, social and governance factors already impacting your business.

Bring your knowledge of ESG to the next level. You will learn: 

• Key ESG concepts: Gain a solid understanding of ESG and be in a position to share the multiple opportunities with your board.
• ESG investing: Take an in-depth look at the organisations approaching ESG effectively, how they are gaining from this and the strategies your board needs to adopt for similar gains.
• ESG data: Be clear about the need for quality ESG data and how to interpret it. Learn the best ways to incorporate ESG and sustainability reporting in your organisation.
• Performance: Learn how to persuade the board to build an ESG integrated organisation that links processes, systems and culture to core ESG values.

ESG is how a company behaves itself when it comes to the environment, the people it interacts with and the wider community it which it operates. Investors, business leaders, employees, and the general public increasingly care about environmental, social, and corporate governance issues.

Some companies are already making strides towards meeting significant ESG goals; others are earlier in their process.

This guide is meant to set the ESG table for boards still in the early stages of addressing the issues.

ESG stands for “environmental, social, governance” and is a set of non-financial corporate performance indicators being used to measure the impact that companies have on the environment, their people, and society.

While many third parties are working to address this issue, there is no universally adopted framework for measuring and reporting ESG.

Large investors like BlackRock are increasingly more interested in corporations that support societal goals rather than focusing narrowly on shareholder returns.

BlackRock CEO Larry Fink wrote in 2022 that corporations should aim to maximise their positive social impact and shareholder value.

In 2019, nearly 200 CEOs of the United States’ largest companies rejected a decades-old policy that defined a corporation’s primary purpose as shareholder return.

Their new purpose would be to “not just serve their shareholders, but also deliver value to their customers, invest in their employees, deal fairly with suppliers, and support the communities in which they operate”.

According to a 2020 McKinsey study, 83% of executives and investors expect ESG programs to provide more shareholder value in five years than today.

Another factor driving ESG is employee expectations. Employees expect more from their employers. They are also more willing to use their power.

You can look at Google’s global walkout in 2018 as an example, in which 20,000 employees walked out of work to shed light on harassment and discrimination inside the company.

Due to all these factors, companies that don’t focus on ESG may soon find themselves at a competitive disadvantage.

Let’s briefly look at the highlights of the three pillars within ESG: environmental, social, and governance.

Environmental

The environmental aspect of ESG examines how a business impacts the environment. Everything from a company’s operations to the natural resources and every step it takes in the supply chain can be included.

Many corporations find it difficult to disclose climate-related information. The fact that industry-specific standards are evolving and indeed converging is positive.

Social

The social component, by far the most challenging of the three, relates to how a company navigates its workforce and its place and activities in the context of society at large, including politics.

In the “S” category, major movements like #MeToo and Black Lives Matter are driving much of the narrative. These movements are propelling historically challenging issues to the forefront of corporate boardrooms.

Governance

Institutional investors and proxy advisory firms have focused on governance for such a long time that it is the most mature of the three pillars. Governance relates to how a company makes critical decisions and can include a broad range of issues, including board diversity, CEO succession, executive compensation, and more. 

The next steps for the board

ESG reporting can seem like an enormous task. Boards are increasingly addressing ESG issues, with nominating and governance committees taking the lead.

First and foremost, it is imperative to understand what has already been said internally and externally about ESG and what steps are being taken to follow them up. Disclosure should be factual and not aspirational.

In a changing world, board members must have the ability to navigate new and updated thinking.

Boards must continue to engage with stakeholders on what ESG metrics are meaningful for their companies to measure and disclose.