Improving Responses to Crises: Incorporating ESG Considerations into Effective Crisis Management
Highlights
Incorporating ESG into a crisis management plan can help protect a company from further reputational and economic harm
Diversity of job function and seniority on a crisis response team can lead to more pragmatic and achievable plans of action
While transparency may assuage stakeholders’ concerns, companies must consider potential liability and trade secret preservation in crisis management responses
“[C]limate risk is investment risk.” With such strong pronouncements as this from an institutional investor, it is clear to see that environmental, social, and governance (ESG) considerations are playing an ever-growing role in the decision-making of businesses across numerous industries. This is particularly true as states such as California pass new laws requiring ESG disclosures and the Securities and Exchange Commission is finalizing similar rule proposals.
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