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In the 2021 Airmic survey, Environmental, Social, and Governance (ESG) was the top topic of concern for Airmic members. Each of its pillars was featured in the top five hot topics:
Regulatory compliance (number one: governance), reflecting new mandatory and voluntary reporting; establishing a thriving diversity and inclusion (number three: social) culture; and transition to net zero impacts (number five: environment).
Increasingly, organisations are using ESG criteria and key performance indicators to shape and communicate their strategic goals and drive their operational execution. They’re also being used as a basis for reporting on sustainable practices to internal and external stakeholders.
ESG’s many facets can impact each business in different ways. For risk managers, challenges include knowing where to start, roadmapping and prioritising this year versus next, making wise choices with key decisions (for example, the most appropriate climate model), and managing operational and financial risks while seizing opportunities.