ESG: The Missing R?

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ESG: The Missing R?

The role of Risk and Resilience in navigating

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a more uncertain and turbulent world

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Introductions

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A visionary business strategist, board level advisor and interim director with 30 years’ global experience.

With an outstanding record of driving shareholder return for multinational finance houses, strategic and operational lead of large-scale corporate development, business transformation that drives bottom-line growth, proposition and innovation, cost reduction, and risk management.

Robert is the founder of Aspire and is an experienced business strategist and digital business transformation director. He has over 30 years transformation programme management, M&A, ITO, BPO, Shared Services, ERP, Digital, Big data, and Business analytics experience gained from working with Ernst & Young, HP, CSC and Cincom Systems among others. Recent clients have included HSBC, Xceed, Equiteq, TunstallHealthcare, and Cognizant.

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Session Agenda ● ESG and the global ecosystem of

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build a more sustainable, responsible

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● The role of risk and resilience in ESG ● How Plutus /Summit & Aspire can help you

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enterprise

brand

● Practical steps and takeaways from the

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Plutus / Summit & Aspire journey organization

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integrating ESG into the fabric of your

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ESG & the Global Ecosystem of Enterprise

Environmental

Social

Preservation of the natural world, sustainability:

Consideration of global community and our interdependencies:

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Customer success Gender and diversity inclusion Social obligation of enterprise Employee health & safety Data security

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● ●

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Governance

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● ● ●

Climate change Carbon reduction Water scarcity Pollution Deforestation

● ●

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What is ESG?

The defined process of running a business:

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Board of directors Executive and venture partner compensation Political lobbying Hiring and employee onboarding Business and supplier ethics

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In fact, from the pandemic and devastating weather events of last year to a restive and divided set of social movements, the growing pace of upheavals points to the fact that ESG measurement doesn’t just need more uniformity, rigour and breadth.

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It also needs an additional variable in order to assess businesses' capacity to effectively recover, adapt and grow in the face of shocks and stress: resilience.

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Simply put, it is increasingly clear that investors can no longer outrun or ignore social and environmental problems. All evidence points to continued business and financial disruption in the years ahead."

World Economic Forum June 2021

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4 Key Trends Driving ESG in Risk and Resilience

CHANGES IN OPERATING MODELS AFTER COVID

OPERATING MODELS

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COVID-19 has elevated the importance of how companies operate and accelerated the growing relevance of ESG considerations to investors.

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STRUCTURAL CHANGES IN RISK & RESILIENCE

BOARDS

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INCREASED CLIMATE-RELATED INCIDENTS

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CLIMATE

Lasting impact on their reputation and future relationships with customers, vendors and regulators. Investors are using their influence to drive behavioral changes.

SOCIAL

Frequency of climate-related incidents continues to accelerate. As an example, There were 22 separate billion-dollar weather and climate disasters across the United States, shattering the previous annual record of 16 events, which occurred in 2017 and 2011. (NOAA)

FOCUS ON SOCIAL OBLIGATION OF ENTERPRISE Corporate management of issues such as human rights, employee wellbeing, and community relations are under scrutiny. Their actions could have lasting impact on their reputation and future relationships with customers, vendors and regulators.

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What are my investors’ expectations?

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What are my regulatory obligations?

What are my customers and employees asking of me?

How does this impact the long-term health of my company?

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What is my financial risk?

How will ESG-related risk impact my operations?

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Common ESG Questions

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Risk and Resilience: Our Role in ESG

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Why is ESG important for risk and resilience?

Top Short-term and Long-term Risk

Growing Number of Incidents

Companies are facing growing expectations and reporting requirements from regulators and investors.

Climate, political, social, and business ethics pose some of the greatest threats to organizations today. Climate, in particular, is receiving unique focus.

Growing number of climate, social, and ethics-related in incidents, with greater impact to the firm and the global community.

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Increased Regulatory and Investor Scrutiny

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Regulator / Investor Scrutiny

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ESG is high on the regulatory agenda

Vulnerability analysis Regulatory & supervisory practices

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Data

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Disclosure

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4.

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4 blocks of activity:

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Regulator / Investor Scrutiny

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Shareholders Demand Action on ESG

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● Recently, 98% of General Electric

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shareholders approved asking for transparency into how the organization will with the Paris Agreement.

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achieve zero net emissions in compliance

● Amazon stakeholders proposed a racial

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strong support.

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equality audit be conducted, garnering

● Climate activists recently won three seats on Exxon's board, zeroing in on the priority of ESG topics for board agendas.

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Top Global Risk

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Major Categories of ESG Operational Risk Environmental

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● Damage to Physical

Governance

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Safety Responsible Outsourcing Data Security

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● Business Disruption & System Failures ● Clients & Business Practices ● Employment Practices & Workplace

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Assets Social

● Internal / External Fraud ● Image & Reputational ●

Risk Responsible Investment

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Incidents

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Incidents are Increasing in Frequency, Severity, and Cost

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Short- and long-term impacts to financial

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and operational stability

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Domino effect of disruption

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risk, in particular

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Ambiguity around the trajectory of climate

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Plutus/Summit & Aspire : ESG

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Anticipate, prevent, prepare, and respond to ESG risks & events Build business insights that scale across

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Track emergent risks, then evaluate

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potential impact through scenario planning and orchestration.

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your industry and operating ecosystem.

Respond to risks and events with a real-

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they happen, learning over time.

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time perspective of emerging events as

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Map Important Services

Set Impact Tolerances

Proactively Mitigate Risk

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Identify Important Services

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Define and prioritize services

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Define Your True North

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The Emerging Standard for Resilient Operations

Set proactive limits

Scenario Model, Test, and Improve

Monitor & Anticipate

Learn and Adapt

Model, test, anticipate, and adapt capability

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The New Operating Model for the Modern Enterprise

PREPARE

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OBSERVE

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OPERATIONAL INTELLIGENCE

LEARN

ACT

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Plutus/Summit & Aspire Makes Observability & Response a Reality Operational Intelligence

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Operational Resilience Framework

Risk & Business Continuity Op Risk

Third Party Risk

Crisis, Disaster Recovery

Incident & Crisis

Scenario Modeling & Testing

Enterprise Data

External Data

Systems

NParty

Process

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Plutus/Summit & Aspire Data

Tech & Cyber Risk

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BC / DR

Test, Respond & Learn

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Anticipate & Prepare

Places

People

Regulatory

Situational Intelligence

N-party Risk Insight

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Risk and Resilience teams are starting to use Plutus/Summit & Aspire to address ESG-related concerns

Third party assessment & collaboration

Scenario testing & incident management

Climate, social, and governance risks can be cataloged in Plutus/Summit & Aspire, their impact measured, and controls set.

Companies can assess their suppliers and third parties against regulatory and organizational benchmarks surrounding ESG.

Teams have been leveraging incident management to direct teams’ response to climate, political and social, and other events.

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Risk sensing, registers & controls

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Manage your risk Leverage new risk integrations, scenario

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modeling, and role-based experiences

simulate conditions quickly,

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● collaborate on ESG scenarios virtually, ● intake situational intelligence and

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to:

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● understand what-if scenarios clearly, ● predict results more accurately, ● and provide the playbooks to respond.

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Collaborate with third parties

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Ensure your vendors are managing to the same standards by leveraging Plutus/Summit & Aspire's assessment and collaboration tools:

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insight into climate, social, or governance risk Manage third parties as a natural extension of your crisis and incident response

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● Take a proactive approach by providing real-time

● Leverage Key Indicators to continuously track the

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most important risk and performance metrics Surface key ESG risk metrics for the vendors which are most critical to your operational landscape

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Test your response and manage exposure Define important business services and

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plausible scenarios

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Specify assets lost as part of severe but

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map dependencies

from those dependencies in your

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information foundation

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Find and surface recovery gaps derived

Initiate workflows to address the gaps for stronger resilience and better compliance

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Plutus/Summit & Aspire's Journey

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to a more sustainable and responsible enterprise

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Plutus/Summit & Aspire's ESG program goals

Sustainable, community-minded, and ethical enterprises are built to withstand shocks and stress, defining what it means to be a responsible brand.

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efforts in building a more sustainable, sociallyconscious, and ethical world.

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Provide greater visibility into Plutus/Summit & Aspire's

Support our customer's efforts in building greater resilience

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Greater transparency and reporting

Promote the work of risk and resilience in ESG Risk and resilience teams have been leading ESG efforts well beyond a formal definition. As ESG efforts scale, Plutus/ Summit & Aspire's community is a source of inspiration and learning.

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Journey to a more sustainable and resilient enterprise Product

Initiated

Assessment

Oct

Nov

Dec

Jan

Feb

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Board

Benchmark

Update

ESG & Plutus/ Summit & Aspire Product

Mar

Apr

May

Jun

Jul

Aug

Sep

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Research & Goal-Setting

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Survey

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ESG / OR Council

Survey/

Survey

Survey

Assessment

feedback

feedback

Q1 Exec

Exec

Governance

Customer

Update

Calibration

Committee

Webinar

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Learnings: Benchmarking

categories.

3. Right-size your program to your

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ability to deliver for your customer.

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2. Understand what directly influences your

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1. Goal is not to score 100% across all

organization’s size and obligations.

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4. Clearly delineate where your organization is best suited to provide support. on what works.

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5. Start small, measure, and build iteratively

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ESG is an Integral Part of a Resilient Enterprise Social and community is at the heart of a

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bottom line.

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enterprises but is also good for the

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sustainable, fair, and community-minded

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A strong ESG focus not only drives more

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resilient enterprise.

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@Plutus/Summit & Aspire

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Thank You