Organizations worldwide and across diverse industries are challenged to define, implement, and then report on Environmental, Social, and Governance (ESG). The pressure is real from all directions: customers, investors, regulators, employees, and activists. The truth is, ESG has teeth, and organizations need to do something about it.
With time, several amendments and additions are being made to the ESG sector to enhance its impact and ensure all concerns are comprehensively captured and addressed.
GRC (Governance, Risk, and Compliance) is a more recent introduction to ESG. Keep reading to learn what GRC means, what it covers, and how it benefits the ECG.
Governance, Risk, and Compliance (GRC) is an integration of capabilities that help organizations achieve their goals and objectives, analyze uncertainties, and conduct actions with honesty and integrity. The term is new but connotes a modified or upgraded version of an already existing model.
Fundamentally, GRC focuses on standardizing and streamlining approaches that enable the right stakeholders and concerned people to obtain the right information at the right time. It helps ensure that coordinated actions are taken to address certain matters while attaining integrity.
Integration of GRC into ESG
It appears as though, for many, the environment is the only aspect of the ESG that organizations are targeting. The other two aspects, Society and Government, are given little attention while we see tons of efforts being poured into the Environment.
The government can change the dynamic by retaining more attention and focusing on the ESG target’s competitiveness. The challenge here is the lack of ESG’s effective reporting and monitoring of the government’s aspect. External initiatives are imperative to rectify this.
GRC plays a significant role in ESG processes, as it offers more structured and detailed guidance on how organizations could attain and deliver the ESG target. Both the concepts share a common component: the G, which refers to the Government. Therefore, it begins with clearly defined objectives and rights when it comes to governance areas, followed by uncertainty and risk management.
Consequently, organizations that integrate Governance, Risk, and Compliance into Environmental, Social & Governance reports could be relied upon. When put into context, the GRC capability model focuses on learning, aligning, performing, and reviewing. The essence of all of these processes lies in providing detailed pathways for organizations to report ESG targets competently.
Practical Ways GRC Benefits Organizations
When utilized in the right manner, GRC brims with myriad advantages. With GRC processes, organizations can eliminate action duplications, reduce costs, and provide quality information. All of which are crucial for organizations looking to attain sustainability in the longer run.
Organizations also have better access to investors and investments when they’re put at the top of the list based on your ESG efforts. The GRC also adequately prepares organizations for the novel standards of ESG reporting and increases the level of trust of the customers and public investors in your organization.
In a nutshell, the robust relationship between the struggle for ESG and GRC principles could be viewed as a pathway to helping businesses and organizations attain their ESG goals more effectively while enhancing productivity and reducing costs. The GRC certification is also a great way to gain a competitive edge as it helps highlight the bolstered and effective integration of social, government, and economic developmental actions.
Get in touch with us if you’re looking for actionable insights for developing a robust ESG strategy that helps investors make choices that support the planet and the people who live here. At OWL ESG, we believe long-term profitability significantly depends on sustainability.
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