ESG compliance and the rise of environmentally stable investing

In case you are not familiar with ESG, it stands for environmental, social and governance. It is a standard of measuring a company’s impact on the environment, how ethically and efficiently it runs its business, and how active it is in promoting social equality for its employees and clients. 

Near the end of 2020, it was reported that ESG investing accounted for roughly one-third of total U.S. assets under management. Businesses that wish to attract new investors should be thinking seriously about ways to improve their ESG scores. This is especially important under the Biden administration, which will be seeking to reduce environmental impact and provide support for businesses that are making efforts to be more environmentally friendly.

Building an ESG compliance strategy

ESG compliance does not happen overnight. It requires a lot of time and effort, but it is worth it for businesses that wish to attract environmentally conscious investors.

Becoming more ESG compliant is different for each business, but there are some general approaches you can adopt to formulate a strategy. If your business wishes to improve its ESG score, staff members responsible for important decisions need to gather and discuss the following:

• Identify areas that could use improvement and discuss strategy options for making these improvements.
  
• Focus on all areas of ESG, not just one aspect, like environmental. A helpful rubrik is to use the United Nations 17 Sustainable Development Goals as a guideline for the areas your business wishes to address.
  
• Identify ways to measure performance with qualitative data, such as improved training, diversity, and anti-harassment classes and other employee wellness platforms.
  
• Establish programs to ensure that your workplace is diversely represented at all levels of operations.
  
• Develop an outreach program to help your business access investors and grants that support ESG-compliant businesses.

Talk to a ProVise CFP® professional about your ESG compliance strategy

Meeting the demands of investors is never an easy task, but the rise of ESG compliance makes it even more challenging. Improving your business’s ESG score needs to be a priority if you wish to attract the growing number of ESG-conscious investors. 

At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and values to help you develop a financial plan that works for you, including an ESG strategy. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.

Are you ready to talk to a professional about ESG compliance? Contact ProVise today to schedule a complimentary consultation.