ESG in Spotlight after COVID-19
As the COVID-19 pandemic trigged an economic and social crisis in the U.S., the debate over Environmental, Social & Governance (ESG) policies has taken center stage.
From the urgency around economic recovery, global supply chain shortages and social inequality exposed by the pandemic, to the need to address other pressing challenges, like climate change, there is growing demand from consumers, investors, employees, and other stakeholders for companies to disclose strong actions around ESG.
In addition, there has been a notable shift in the Administration and on Capitol Hill regarding ESG policies. President Biden has issued executive orders encouraging regulators to assess climate-related financial risk and to advance diversity, equity, inclusion, and accessibility in the Federal workforce. Securities and Exchange Commission (SEC) Chairman Gary Gensler has made reform of ESG disclosures regarding climate change risk and human capital a top priority. Furthermore, the U.S. House recently passed a legislative package on ESG disclosures and is considering other legislation related to climate change and diversity and inclusion. At the same time, there are others who support voluntary ESG disclosure based on a company’s materiality but caution against government and regulatory mandates.
With a growing focus on ESG among the public, investors and in the nation’s capital, many believe that there will be widespread implementation of ESG-related practices across industries and jurisdictions over the next decade. What that will look like remains to be seen.
In this edition, we will explore ESG trends, policies, and issues in 2021 and beyond.
–Gloria Story Dittus, Chairman, Story Partners