A green world through environmental, social, and governance (ESG) compliance
How the power and utilities sector can lead the ESG revolution
A lot of focus is often on the “E” or “S” elements of ESG. But organizations that put in place strong governance and controls may be better positioned to deliver on their goals and comply with reporting and regulatory requirements. And, as new regulatory and compliance obligations emerge, the need to embed ESG factors into business will continue to become necessary beyond corporate responsibilities.
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Why ESG is the key to unlocking a better world
The threatening impacts of climate change are forcing businesses across the globe to hit the reset button. And now, like never before, investors are holding companies accountable. Navigating conflicting priorities is not normally easy, but stakeholders reward the organizations that create sustained outcomes for the environment and the society through effective ESG frameworks.
Climate change reveals a global threat that is real to our economies and way of life—requiring businesses and consumers to face this challenge head on through measurable and verifiable actions. However, it’s also an opportunity for innovation and growth that can help drive decarbonization, create new products and services, and enhance customer satisfaction.
Examples of organizational agendas and stakeholder priorities specific to the power and utilities sector include:
- Environmental: Decarbonization through “responsibly sourced gas”
- Social: Formally-adopted goals based on targeted location to enhance supplier diversity and address social inequality
- Governance: Focus on the strength and rigor of corporate compliance programs, including “E” and “S” components and the emergence of dedicated sustainability functions
The power and utilities sector can greatly benefit from taking a proactive approach to ESG and compliance. Meeting its own requirements and those of regulatory bodies now and in the future enables it to remain in the driver’s seat rather than being in reactive mode and letting business decisions be driven by its stakeholders.
Now, what’s the way forward? A global effort of governments and regulators toward evaluating the policies and regulatory requirements is a proactive step. That should reinforce the commitment to ESG investments and assess and mitigate the climate-related risks—risks that will impact financial sectors and economies globally. However, the increased number of voluntary initiatives and the global focus on reporting, data collection, and disclosures will continue to evolve and will impact the way the industry mitigates risk.
The challenges and opportunities that ESG presents are not always certain. But they will continue to be at the forefront of how the power and utilities sector operates and evolves. As new regulatory and compliance obligations emerge, the need to embed ESG factors into business will continue to become necessary beyond corporate responsibilities
Read the full report to learn more about how your organization can drive meaningful change.
