June 1, 2021
Authored by: Nicole Bigby, Jackie Thomas and Lydia Octon-Burke
In our hyper-transparent and increasingly joined up world, the concepts of corporate social responsibility and socially responsible investing are gaining greater currency. Over the last decade, and catalysed by COVID-19 over the last year, Boards and General Counsel have focused on the role of ESG in driving responsible and sustainable business conduct approaches which acknowledge that the purpose of a company should be amplified beyond just shareholders to also explicitly include their employees, clients and the communities in which they operate. In fact, the Chief Justice of the Delaware Supreme Court, the Honourable Judge Leo Strine in a piece he wrote for the Financial Times, has already suggested the next generation acronym – EESG: Employees, Environment, Social and Governance.
So, what does this mean and why is it important for employment professionals? Hopefully the first E is a clear hint (it’s not a typo)!
What is ESG?
ESG is the umbrella term for broad range of Environmental, Social and Governance factors against which a company’s stakeholders can holistically assess the performance, value (risk/opportunity), investment in respect of the company. Many ESG factors contribute to a company’s “social licence to operate” and responsibility to its stakeholders and the creation of long-term holistic value for a