By: Luis Gerardo Ramírez Villela
Environmental, social and corporate governance (ESG) standards help shareholders and investors not only manage potential risks within the company in which they participate but also identify opportunities for improvement in relation to the environmental, social and corporate governance principles that apply within a company for the generation of clients and compliance with applicable legal provisions.
In this sense, the specific area in charge of the ESG strategy must ensure that there are specific internal regulations for each area of compliance with the applicable internal and external regulations, and for such purposes a program must be created to ensure compliance with the following:
- Disclose the applicable external and internal regulations;
- Provide training to the company's directors, officers and employees;
- Implement ESG regulations in the company's policies;
- Create a global sustainability framework to which all business operations must adhere;
- Create and implement ethical policies in the areas of environment, society and corporate governance;
- Submit monthly, quarterly, half-yearly or annual reports in order to verify compliance for each work area; and
- Conduct an annual internal audit in order to identify any potential risks and be able to correct those risks identified within a specific period of time.
The importance of maintaining strict monitoring of regulatory compliance and ESG principles is vital to (i) improve the credibility of society and be seen as a “socially responsible company”, (ii) avoid fines or sanctions of any nature, (iii) reflect a positive impact on the environment, (v) show an impact on its participation with society, and (v) improve its corporate governance.
It is important to mention that of the points mentioned in the program, greater attention should be given to training since in this way sanctions can be avoided.
Training will be of great importance and may be provided through training courses by experts in each subject and through interviews with the area in charge of regulatory compliance.
Each of the points must be reviewed with their advisors and have officials in charge of supervision by work area in order to achieve adequate management and ensure that the corresponding ESG program is up to date for the benefit of corporation.