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ESG (Environmental, Social, Governance) is a label for a fundamental shift in the forces that can drive business value and decision making. The shifts include natural forces that can include storms, floods, heat and drought as well as changing demographics, rising inequality and political volatility. The shift also includes regulatory pressures like the U.S. Securities Exchange Commission's proposed rule on climate disclosures, the European Union's Corporate Sustainability Reporting Directive (CSRD) and emerging rules under other standards. And, perhaps most importantly, there has been a fundamental shift in market demand. Employees, customers and investors want to work for, buy from and invest in companies that are aligned with their personal values.
PwC’s Sustainable Value Governance framework can help business leaders devise a thoughtful, strategic response to these three "ESG forces" — natural, regulatory and market — that can drive value by reducing risks, efficiently meeting regulatory requirements and creating a competitive advantage.
95% of leaders say their company is prioritizing ESG reporting more now than before the SEC climate disclosure rule was proposed—and that they are taking proactive, compliance-related measures.
It is important to differentiate between ESG corporate strategy and ESG reporting. Look to align your enterprise on a focused number of high-impact ESG goals and metrics needed to drive long-term value creation, while responding to the expansive pressures listed below.
Click around the circle to learn more about these factors coming to light across the business landscape.
The PwC Sustainable Value Governance framework:
The Sustainable Value Matrix maps stakeholder ESG needs on top of risk management, growth and other strategic concerns to produce a three-dimensional picture of the company’s potential market opportunities and risks.
The Sustainable Value Book is both a strategy setting and corporate governance process. The book provides a clear, concise strategy narrative, progress reporting, message discipline and control and documents the supporting data. It helps communicate the strategic plan through the organization and forms the basis of external communications.
These elements are combined with execution planning and strong data and reporting structures. By drawing information together and translating it across functional areas, Sustainable Value Governance can help you create an enterprise-wide ESG strategy that builds trust with stakeholders, satisfies investor and regulatory demands and differentiates your company from competitors.
Sustainable Value Governance is a thoroughly documented oversight and strategic process that can help you:
With PwC’s Sustainable Value Governance, you can realize the value of ESG as a strategic asset in helping meet regulatory requirements, attracting talent, creating customer loyalty and continuing to build trust among stakeholders.