ESG Criteria:

Understanding, anchoring,
becoming a pioneer

For companies, acting sustainably has gone from being optional to mandatory. Even from a purely regulatory perspective, companies are required to comply with sometimes highly complex regulations, the implementation of which includes the criteria environment (E), social (S) and governance (G).

Although most people think of the urgently needed protection of the climate and the environment when they think of "sustainability”, social concerns – such as the protection of human rights along the entire value chain – and governance concerns – such as appropriate corporate management and ensuring legal and legitimate behavior – are equally important aspects of sustainable action.

Lack of capacities and competences

While these are precisely the reasons why many companies are now willing to anchor ESG criteria in their corporate strategy, they often lack the capacities and competences to be able to create an effective ESG strategy. The sheer number of national and international regulations makes it difficult even for people with legal training to keep track of everything. This is especially true for companies in the finance and insurance sectors. As investors with considerable investment volumes, they not only have to respect their own ESG strategies but also those of their investments. This is because capital investments are also subject to strict regulations due to the EU taxonomy on sustainable investment. This also includes the question of how the sustainability of one's own actions is reported. Because from January 1, 2024, all EU-based companies with more than 250 employees must provide reports for the fiscal year 2023.

Companies must start “doing”

In addition, the following applies to these highly relevant and heavily regulated topics: Of course, it's not enough to simply talk about this. Companies must start “doing”. For this purpose, it is a good idea to first have a detailed knowledge of all the regulatory issues and to conduct an analysis of one's own status quo. To set up a suitable ESG strategy, companies then need to expand their own information management competences: Like so many innovative areas, ESG strategies are highly data-driven. Therefore, data from a wide variety of sources must be connected, collected, prepared and analyzed. A strategy can only be consistently implemented on the basis of the concrete results. Companies can clearly position themselves on the topic and can also identify growth areas. ESG strategies should be aligned in such a way that they ultimately lead to more sustainable action as well as profitable innovations.

The path is challenging. Together with our partners, we have been accompanying companies, especially from the insurance and financial sectors, every step of the way with our reliable end-to-end support for many years.

 

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