Environmental, social and governance (ESG) investing has skyrocketed in recent years. In a 2020 survey, 81% of businesses claimed to have a formal ESG program in place. With the addition of ESG factors in overall business strategy, decision-making has become more complex. Ultimately, risks are magnified with the inclusion of ESG. An ESG risk assessment helps organizations measure and manage the risks associated with environmental, social, and governance factors. Here, we’ll deliver 4 quick tips that will improve your next ESG risk assessment.
Tip 1: Add ESG Assessment questions to your pre-qualifying and onboarding investment decisions
You can streamline identifying ESG business risks associated with future cooperations by including the ESG benchmarks. More specifically, this can be done within your onboarding or pre-qualification questionnaires.
Having selected assessment questions that align with your sustainability goals at the selection/onboarding stages proactively addresses ESG risk management. The process is easier and more suited for finding higher-quality suppliers, as well as establishing a reputation of sustainability.
Certainty Software’s ESG Checklist is a pre-built questionnaire that in detail covers the major touchpoints of ESG risk reporting. We recommend Certainty’s ability to manage an ESG risk assessment in a simpler process, with its clean and clear user interface.
Tip 2: Prioritize questions that align with your goals
Take the time to strategize the specific questions your team wants to include in your risk assessments. Any question’s answer can deliver some value to your KPI demands and ESG performance goals. However, are they providing the best value possible for your stakeholders and business strategy?
When deciding on how to start, begin by asking ‘why do we want the answer to this question?’.
This tip not only refers to the specific questions you’re asking but also the type of questions that are being included in your ESG risk assessment. A tip is to use question types that offer quantifiable metrics during your selection processes, such as multiple choice or Likert. In addition to streamlining your reporting process, it also sets a due diligence standard and level of expectation for these organizations.
With Certainty, you can build your questionnaire however you wish. The simple-to-use checklist builder offers customizability with options for any answer type your team sees fit. No matter which way you build your checklist, you will still be able to receive on-the-fly reporting with useful metrics to help your corrective action decision-making.
Tip 3: Automate ESG action delegation
While identifying risks during your assessment is vital, creating the corrective actions needs to be immediate, accurate, and quickly communicated.
It’s recommended to have a solution that automatically identifies, assigns, and tracks corrective actions based on the question benchmarks. Making responsible sourcing decisions more process- and less person-dependent requires the capability to delegate actions immediately based on results.
Certainty’s enterprise-level inspection and audit software are quick at resolving issues identified and reducing risk exposure. Custom actions are quickly integrated into your risk assessments. This can then be delegated to specific team members, sites, and site groups. Alongside these actions, you can also request and include images, files, and documents.
Tip 4: Consider your suppliers during the risk assessment process
While from your perspective you may think your assessment and questionnaires are easy to use and not time-consuming, this might not always be the same case for your suppliers. During a process where supplier buy-in and collaboration are necessary for optimal results, considering the process for suppliers is important.
30+ Audit and inspection checklists free for download.
We suggest using a solution with a user interface that is clean and clear. Ultimately, this will make managing ESG risk simpler.
Certainty Software makes ESG risk assessments easier for all parties involved. Language barriers are eliminated with multilingual capabilities, and configurable access profiles, organizational structure, sites, and site groups.
Look to simplify your ESG risk assessments for all parties with Certainty Software. Language barriers are eliminated with multilingual capabilities, and configurable access profiles, organizational structure, sites, and site groups.
Certainty Software makes it easy for you to assess your environmental, social, and governance risk factors, and take steps to mitigate them. Whether you’re using Apple, Android, or offline, our software ensures a seamless experience.
You may also be interested in:
ESG Investing: Benefits and Implications for Businesses
ESG Score: What It Is And Why It Matters
Solutions: ESG Assessment Solutions
