Considerations for Boards and Management in the development of corporate responsibility and sustainability risk frameworks
Definitions and scope – corporate responsibility I sustainability I ESG
Importance – recognition of risks and opportunity
Core principles – integration I inter-relationships I transparency I accountability I collaboration I assurance
Strategy alignment I risks and opportunities I performance enhancement
Sustainable product development I sustainable finance
Strategic change I business transformation I culture I strategic planning and budgeting requirements
Peer benchmarking
Industry collaboration I external assessment
Funding – ESG indices I ratings I investor viewpoint
Code and regulatory alignment – global and industry sustainability standards
Board recognition, engagement, sponsorship and oversight
Board education – Environmental, Social and Governance (ESG) risk components I standards I risk assessment tools I metrics
Governance framework – responsibilities I board and governance committees I organisational structure I policies and procedures I management information
Corporate governance link
Firm-wide engagement I cross-business working forums
Talent I training I skills
Incentives alignment, remuneration and performance measurement
Stakeholder engagement and communication I employee and investor relations
Link to existing Corporate Social Responsibility (CSR) and corporate philanthropy I impact initiatives
Quality assurance – first, second and third line of defence
Risk register recognition and prioritisation
Risk identification and classification I taxonomy I integration I cross-cutting into enterprise risk management
Risk appetite
Risk assessment and measurement – impact analysis I target setting I scenario analysis
Risk monitoring
Strategic and governance risk I reputational risk (customers I talent I investor funding)
Financial risk – lending and investment portfolios and collateral
Regulatory risk – code and regulation compliance and horizon scanning including code signatory commitments
Operational risk – business continuity I resilience I fraud I IT I data
Reporting I metrics I disclosures I commitments – process I data quality I green-washing legal and reputational risk
