"What Board Members Need to Know about the “E” in ESG (Environmental, Social and Governance)" from Pillsbury provides big picture guidance to management and boards on how to manage and oversee environmental risks. The firm generally recommends a collaborative approach that consists of: (i) identifying risks, (ii) assessing their materiality, (iii) identifying or developing and implementing responsive corporate policies & procedures, and (iv) communicating outwardly to inform investors, avoid reputational harm, and increase long-term value. The firm further recommends that an appropriate board committee be specifically charged in its charter with environmental risk oversight.
In view of the increasing reliance by investors and financial institutions on ESG ratings for engagement and decision-making, the memo also explains for illustrative purposes how the environmental ratings used in the ISS Environmental Disclosure & Social Disclosure Quality Score and State Street R-Factor are generated.
See our new Society/Curley Global IR/ Carlow Consulting: "ESG Implementation Guide: Getting Started. This post first appeared in the weekly Society Alert!