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By Frederick Isleib, Director of ESG Research and Integration, Manulife Investment Management
Eivind Lorgen, Chair, Sustainability Accounting Standards Board (SASB), Investor Advisory Group (IAG)
In what ways can Financial Institutions work to keep ESG as a consistent focus within their day-to-day operations?
Frederick: To maintain a consistent focus on ESG there must be full buy-in throughout the organization beginning with senior management and the board of directors. The strategic direction undertaken by the firm must incorporate critical aspects of ESG that are material for financial institutions and its clients. Daily operations of the institution should include risk management reports that monitor these material ESG factors so all employees are tracking the same metrics. Institutions should also proactively provide external reporting to stakeholders to demonstrate the results of their efforts.
Another key tenet to ensure there is consistent ESG focus lives with employees. Institutions must recognize that robust human capital management protocols, where a company leads by example, is required to instil a culture with a constant lens on ESG. Regular ESG training for employees is essential and should include both current material issues as well as emerging issues.
Eivind: Financial institutions must continue to engage with corporate issuers to support them in reporting financial material sustainability matters. SASB/VRF and IFRS (ISSB) have begun the baseline work of developing global unified sustainability disclosures for the financial markets, streamlining the current sustainability corporate disclosure landscape and making it easier to identify and report on vital information impacting investors. This also needs to be in place as asset managers product develop ESG/ Sustainability funds and products to the retail market in a (more) compliant way. SASB has published a number of useful ESG integration cases developed by asset managers.