An introduction to responsible business
Responsible business and ESG (Environmental, Social and Governance) considerations continue to dominate conversations in boardrooms across the world, as we seek to adapt and find better and more sustainable ways to operate and grow.
To operate responsibly, businesses need to embed objectives into their strategy and governance which seek to minimise their impact on the environment and have a positive impact on society. It is also increasingly important that businesses' operations are transparent and able to demonstrate accountability.
How can we help you?
We are helping organisations across various sectors to develop at Board level and beyond their strategy for each of the ESG pillars ensuring that they adapt how they operate, and have the flexibility, strength and resilience to thrive now and in the future. Our team can help provide an initial audit service identifying and considering key objectives under each pillar and assisting both your legal and commercial teams in embedding the principles into the governance of your organisation.
Where to start?
Breaking the strategy down into the different ESG headings must be the starting point for any organisation. We will assist you in helping key stakeholders and ultimately the Board to focus on their core responsibilities/priorities under each heading.
These responsibilities/priorities can be broken down into three areas:
- Legal Responsibility
We would work with you to identify where your organisation's responsibilities/priorities lie and then perform an audit of the relevant business documents to identify any gaps and omissions. We would work alongside your technical and policy advisors to ensure that their recommendations are followed through into the documentation and governance arrangements where possible.
We would suggest a governance review together with a review of all supply chain contracts and agreements to ensure your strategy is embedded. Key gaps and risks can be identified, and a list of key provisions agreed that can be rolled out across your portfolio. We would work with your internal legal and commercial teams in reviewing the same.
In order to embed key priorities and targets into your strategy there are things that you need to consider under each of the following headings:
We would work with you on the creation of a sustainability strategy, linked to science-based targets, other relevant environmental factors to help deliver your net zero goals, and mitigate against climate risk (including potential direct impact, preparing for new Government policy and potential environmental taxation).
We would work closely with you and your technical advisors to measure carbon emissions across Scope 1, 2 and 3 (GHG Protocol) and help to set targets for emissions reduction. Legal input into delivering against those targets is key – support on procurement processes can help build-in suitable reporting obligations and aligned targets across your wider value chain.
We can help translate your net zero goals into tangible policies, covering the following areas:
- Switching to renewable energy
- Energy savings and efficiency
- Carbon offsetting
As we transition to a low carbon economy, adapting to Government policy is essential to minimise your climate risk. Against the backdrop of the climate and biodiversity crisis, business is increasingly influenced by environmental considerations. We can help you navigate the changing regulatory landscape, including in relation to:
- Biodiversity net gain
- Nutrient neutrality
- Air quality.
In many ways the E in ESG is the easiest to assess, but the S is increasingly a key objective for investors, funders and indeed customers. The first step is to develop your strategy. Our experts will work with your organisation to help shape the strategy through workshops and help you lead discussions within your organisation to achieve a coherent cohesive strategy and message.
The next step is to look at the legal requirements in this area which are in the main focussed on diversity and inclusion. We can help you promote, develop and support diversity and inclusion in your workplace and create a sound strategy for best practice and compliance with the law. We can:
- Advise on gender pay gap compliance and reporting for employees based in the UK
- Assist in ensuring that wellbeing strategies are embedded
Assist in promoting, developing and supporting diversity and inclusion in your workplace
- Review employment policies and procedures
- Assist in developing best practice and good employee relations.
Reputational risk is key and in this area, it is important to understand those who are impacted by your business engaging with them in the most responsible way. The community around us and those we work with are the eco-system that businesses use to flourish. By being active members of communities and networks, we can nurture and offer support to help you deliver social value that has a meaningful impact.
We can work with you and help you to find the most suitable communication methods for community engagement and collaboration. These can cover:
- Apprenticeships and education
- Community and employee engagement
- Local employment initiatives
- Facilitation of volunteering
- Collaborating with education.
All of the above need to be embedded in the governance of your organisation. Inserting obligations into contracts only works if there are reporting mechanisms so that you can be clear that your objectives are being met. We would help devise a reporting system to ensure you have an audit trail.
There are a number of areas which are not only legal requirements but also impact on reputational risk:
- Anti-Money Laundering legislation
- Modern Slavery Act
- Cyber security.
We have specialists in all of these areas who would carry out an initial, high-level, review of your governance arrangements identifying gaps in these areas.
We can then work with your legal and commercial teams and board to ensure that the Board Members and staff understand the obligations, including the chairman's responsibility leading the Board, and non-executive director duties and general codes of conduct.