Last week during our “compliance for financial services” call, we discussed: What does ESG mean for compliance teams?
ESG, Environmental, Social, and Governance is increasingly on the radar for compliance teams as the ESG reporting requirements came into law for some sectors this April. As well as reporting requirements, firms need to consider that investors, employees and customers are also looking at their ESG credentials as part of their decision on whether to work with a firm (or not).
In this panel session we had Gail Wessels, Governance, Risk and Compliance Specialist and Trainer at The International Compliance Association, Kyra Brown who specialises in Sustainable Finance Regulatory Developments, Cathy Rylance a consultant who works to help firms develop socially responsible approaches as well as hosts Kate Jones and Steve Brett.
We explored ESG and what it means for compliance teams now and how it is likely to change in the next few years. Our key takeaways were:
As well as the regulations themselves, firms need to consider their reputation amongst investors and customers. Negative press surrounding ESG can lead to huge consequences with regards to customers and investors.
Firms tend to focus largely on Environmental issues and often Social is forgotten. It is reported there are more slaves now than ever before in the UK and the regulations are tightening on what firms are doing to educate and eradicate this. Don’t forget to consider your firms 3rd parties and suppliers as the regulators will consider these ‘as part of your business.’ So, although you may be doing the right things ‘in-house’ if you are seen to be working with a 3rd party promoting modern slavery the consequences will be severe.
Be aware of the dangers of using false promotion. We saw this recently on International women’s day where a twitter bot was re-posting organisations posts celebrating women alongside their gender pay gap figures. Although it was funny, it’s also a serious topic, if you have social issues set ambitions to fix them rather than hide them.
The regulators will no longer take things on face value, they want to see evidence in practice so just because your policy says X – Is this really what is happening? They will want to see payslips, speak to the team and see the processes in action
As always, we had an insightful discussion and if you work in compliance at any level and want to join, send an email to firstname.lastname@example.org and we will add you.