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Manage ESG risks with enterprise risk management

An effective enterprise risk management (ERM) framework provides essential, quantifiable data needed to understand the scale and the variables affecting ESG risks.

With traditional forms of risk, the event horizon can be three to five years between risk exposure and impact to your business and your reputation. But with environmental, social and governance (ESG) the situation is more complex. An environmental risk event, for instance, can have short-term fallout as well as long-term implications for the reputation of your business and long-term value. Additional ESG risk can arise within the organization, from talent development requirements and practices to labor policy and workplace culture. The future workforce wants and expects change to happen.

Sixty-four percent of millennial employees won’t take a job if an employer doesn’t have a robust corporate social responsibility program in place.1 And with purpose-driven, socially motivated Gen Z making up an estimated 27% of the workforce in OECD countries by 2025 according to the World Economic Forum,2 the need for companies to become socially aligned with causes for good (and have the governance practices in place to support them) is now critical. Tomorrow’s employees want more than words – they expect policy and action.

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