ESG stands for Environmental, Social, and Governance. It refers to a set of criteria or factors that investors, stakeholders, and organizations use to evaluate a company's performance and measure its impact on society and the environment. Here's why ESG is important: Sustainable Business Practices: ESG encourages companies to adopt sustainable business practices that minimize their environmental footprint, promote social responsibility, and uphold high standards of corporate governance. By integrating ESG considerations into their operations, companies can reduce risks, enhance resilience, and create long-term value for shareholders and stakeholders. Risk Management: ESG factors help identify and mitigate various risks that may affect a company's financial performance and reputation. Environmental risks, such as climate change, resource scarcity, and pollution, can impact operations, supply chains, and regulatory compliance. Social risks, such as labor practices, human rights issues, and community relations, can lead to reputational damage, litigation, and operational disruptions. Governance risks, such as board diversity, executive compensation, and ethical behavior, can undermine trust, transparency, and accountability. Stakeholder Engagement: ESG fosters dialogue and collaboration with a wide range of stakeholders, including investors, customers, employees, suppliers, regulators, and communities. By addressing stakeholders' concerns and expectations related to environmental stewardship, social impact, and corporate governance, companies can build trust, strengthen relationships, and enhance their reputation and brand value. Long-Term Value Creation: ESG-focused companies are better positioned to drive sustainable growth, innovation, and competitive advantage in a rapidly changing business landscape. By aligning business objectives with societal needs and environmental imperatives, companies can create shared value for all stakeholders and contribute to the achievement of global sustainability goals, such as the United Nations Sustainable Development Goals (SDGs). Regulatory Compliance: ESG considerations are increasingly being incorporated into regulatory frameworks and reporting requirements around the world. Governments, regulators, and industry associations are introducing policies, standards, and disclosure guidelines to promote ESG transparency, accountability, and performance. Companies that fail to address ESG issues may face regulatory scrutiny, legal liabilities, and financial penalties. Overall, ESG is important because it promotes responsible and sustainable business practices that benefit society, the environment, and the economy. By integrating ESG considerations into decision-making processes and business strategies, companies can drive positive change, mitigate risks, and create long-term value for all stakeholders.

1. DEI AND
ENVIRONMENTAL,
SOCIAL, AND
GOVERNANCE
Greg DeShields

2. ESG
HUMAN RESOURCES

3. ESG refers to a set of criteria
that investors and other
stakeholders use to evaluate a
company's sustainability and
social impact.
Human Resources is important
in a company's ESG
performance, as they manage
the organization's workforce and
promote a positive workplace
culture.
ESG AND HR

4. Highly skilled, knowledgeable,
and experienced individuals
with a track record of delivering
exceptional results.
Top Talent
HR can advance a company's ESG
goals by promoting sustainable
practices and supporting employee
wellness and development.
Human Resources
Encouraging sustainable practices
and prioritizing wellness and
development, improving a
company's impact on the planet.
Implementing initiatives like
telecommuting programs and
sustainable supply chain practices
can reduce a company's carbon
footprint.
Social
ESG AND HR
HR is important addressing the
social aspect of sustainability.
HR policies and practices
prioritizing DEI, employee
engagement, and labor relations
can significantly impact a
company's reputation and ability
to attract and retain top talent.

5. ESG
EVOLUTION

6. Environmental criteria refer to
an organization’s
environmental impact(s) and
risk management practices.
Social pillar refers to an
organization’s relationships
with its stakeholders.
Governance refers to how a
company is led and managed.

7. 1980 EHS (Environmental, Health, and Safety)
Organizations in the United States were considering how to use regulation to manage or
reduce pollution.
1990 Corporate Sustainability
EHS evolved, and management teams wanted to focus on reducing their firm’s
environmental impacts beyond legally required reductions.
2000 CSR (Corporate Social Responsibility)
CSR movement began to integrate ideas around how companies should respond to social
issues.
2010-2020’s ESG
Emerge as a much more proactive (instead of reactive) movement.
A comprehensive framework includes critical environmental and social impact elements
and how governance structures can be amended to maximize stakeholder well-being.
THE EVOLUTION OF ESG

8. IMPLEMENTING ESG

9. The process is initiated through
senior executive and board-level
conversations around the
importance of ESG at a private
company and how to develop a
performance Measurement
Scorecard in these areas.
The next step is identifying key
ESG metrics where improvement
is desired and incorporating those
metrics into the company's annual
Incentive Plan design.
PITCH DECK
IMPLEMENTING ESG

10. ESG AND DEI

11. Diversity, Equity, and Inclusion
are essential considerations in
the corporate culture and
similar critical issues in the ESG
processes.
DEI is tightly interconnected
with ESG as they often are
systemic drives of many other
issues that impact and
influence.
ESG
&
DEI
PITCH DECK

12. HOW DOES DEI FIT ESG?
DEI is the 'S' in ESG: Shareholders and investors use ESG
criteria as their benchmark for assessing future success.
There is a focus on the non-financial side of a company’s
performance. Corporate leaders embrace the integration
of ESG.
Commitment to principles of DEI building more diverse
workforce information rather than profits and losses
demanding published statements of DEI & ESG goals.

13. HOW DOES DEI FIT ESG?
Integrating DEI considerations into ESG strategies
is essential for companies seeking a sustainable
future.
Developing and implementing policies and
practices that promote DEI throughout the
organization, creating inclusive recruitment hiring
processes, equitable opportunities for career
advancement, and fostering an inclusive culture.

14. ESG
SCORE AND CRITERIA

15. RATING AGENCIES

16. Environmental:
• Carbon and climate
• Use of natural resources
• Waste and toxicity
• Sustainability
Social
• Human rights
• Diversity, equity, and inclusion
• Labor, health, and safety
• Employee satisfaction and engagement
• Stakeholders and society
• Product safety and quality
• Customer satisfaction
Governance
• Board structure
• Compensation processes
• Shareholder rights
• Audit and risk oversight
CATEGORIES
OF ESG
METRICS
USED IN
CORPORATE
SCORECARDS

17. Test Sustainability Indicators
Measure ESG Risks
SUSTAINALYTICS
ROBECO
Scores from 0 to 100
VIGEO EIRIS
Measure 37 ESG Issues
MSCI
ESG SCORE AND CRITERIA
There’s no one standard system for rating companies against ESG criteria.
Several different ESG rating agencies provide clients with assessments of
investments based on the company’s ESG performance.
All these agencies have different ways of calculating a company’s ESG
scores.

18. ESG & INVESTING
PITCH DECK
ESG has gone mainstream. Many ESG rating
agencies and reporting frameworks have
evolved to improve the transparency and
consistency of the ESG information that firms
are reporting publicly.
ESG scores allow investors to gauge the
company’s intentions and actions—from how
they treat their employees to how the board
decisions are made or if environmental
issues are being prioritized

19. CALCULATING ESG
Using performance based on data
gathered from securities filings,
voluntary business disclosures,
governmental databases,
academic research, and media
reports.

20. PITCH DECK
ESG SCORE
An organization’s ESG success should communicate its commitment and progress, increase
employee engagement, manage the associated risk, and ensure its efforts achieve its goals.
While also improving their reputation and performance and gaining greater interest from
investors.

21. ESG
CONTROVERSARY

22. ESG CONTROVERSY
ESG is controversial due to the need for more
standardization in measuring and reporting ESG
performance.
Concerns exist about the potential impact on
financial performance, accusations of greenwashing,
and differing views on what constitutes good ESG
performance.

23. There is no widely
accepted standard for
measuring or reporting
ESG performance.
This can make it difficult
for investors and other
stakeholders to
compare the ESG
performance of
different companies or
evaluate ESG initiatives’
impact.
ESG is too focused on
social and
environmental issues
neglecting the financial
performance of
companies.
Prioritizing ESG
sacrifices short-term
financial gains for long-
term sustainability
hurting the bottom line
and investments.
ESG is a buzzword for
companies engaging in
"greenwashing" making
superficial changes to
business operations
without making
significant progress
towards sustainability
goals.
This makes it difficult to
identify sustainable
companies.
Problem One Problem Two Problem Three
ESG CONTROVERSY

24. ESG CONTROVERSY
Stakeholders have
differing views on what
constitutes "good" ESG
performance, which can
lead to disagreements
and controversy over
the value of ESG
initiatives.

25. DEI AND
ENVIRONMENTAL,
SOCIAL, AND
GOVERNANCE
THANK YOU
Greg DeShields