ESG – Measuring the value of Social Responsibility.
CSR and ESG are both excellent business concepts for the planet and for people. ESG is a scoring/ reporting mechanism with which to measure the impact of a Social Responsibility policy.
CSR is a term that is used by all sectors and industries whether an organisation will be investing/investable or not. The term ESG is particularly employed by the finance and investment sectors who use the specified criteria as a measurement, performance and comparison tool. ESG scoring/reporting includes specific areas such as water usage, health & safety and tax transparency – see graphic below for the full list of ESG categories and to see how ESG fits into the Four Pillars of CSR.
CSR-A Four Pillars interlocked with ESG criteria lists
This diagram shows how a CSR Accreditation can be used to inform ESG reporting and scoring.
The CSR-A Four Pillars of CSR is a framework from which to build your Social Responsibility policy, strategy, procedures and operating dashboard of performance. The ESG measuring tool describes the performance of the subject organisation and makes meaningful comparisons between organisations possible. Measuring the performance of investment is an important part of due diligence and helps investees to make informed decisions.
ESG scoring/reporting continues to be important in order to minimise risk. ESG scoring/reporting will likely be part of an acquisition or undertaken prior to investment in an organisation. It is an essential part of due diligence and risk assessment for managing investment portfolios. High ESG scores consistently translate into higher financial performance
compared to the market average. The level of ESG investment assets exceeded $1 trillion in June 2020, which represents an increase of 72% on 2019.
Many organisations that do not have and do not require investors or investment still work to a set of values that are socially responsible. Very high levels of public engagement with companies that have effective social responsibility policy, without the motivation of external financial investment, is driving a global movement towards socially responsible business.
CSR-A provides the framework to develop your CSR strategy and to impact report. CSR Accreditation will influence your ESG rating should your organisation require investment now or in the future. Accreditation also brings increased focus and structure to your Socially Responsible activities.
CSR-A offers support with an annual CSR health consultation and delivers a structured policy to inform your ESG rating should you need it for investment purposes. CSR Accreditation gives external validation to your efforts and provides you with the tools to build a Social Impact Report.