While regulatory compliance and stakeholder expectations offer a valid rationale for pursuing ESG, companies risk short-changing the real value of ESG by focusing on external motivations. In this article we propose that the strongest arguments for practicing ESG encompass what a company stands to gain by proactively engaging in ESG, rather than what it may lose if it does not. By refocusing on ESG as a strategic tool with positive return on investment (ROI), companies prime external stakeholders to view the choice positively and position themselves to maximize the benefits of practicing ESG.
In this article, we explain why firms seeking a public event in 2024 should consider ESG essential and push forward with ESG programs this fall in order to maximize valuation post-public event, attract long-term investors and prepare for life as public companies.
Biotech and pharmaceutical company boards are under increasing pressure not just to demonstrate awareness of ESG but to take an active role in managing ESG risks and opportunities, and yet the research suggests most boards are not equipped for the job. Companies may hire directors with ESG-related skillsets in the longer term, but in the near term we suggest companies prioritize ESG education for boards to improve overall ESG governance and to satisfy investors, ESG raters and other stakeholders. In this article we tackle what emerging best practice looks like for board education and argue that companies should prioritize ESG board education for the coming year.
Materiality is the key to unlocking value with ESG and avoiding the perception of greenwashing. Out of dozens of ESG issues relevant to an industry, only a handful will have the potential to significantly impact a given company’s performance over time—these issues are material.
Diversity, equity and inclusion (DEI) is an important framework for understanding corporate sustainability and the creation of social good. Understanding how DEI is woven into the fabric of healthcare’s most pressing material issues will help companies unlock value through ESG.
ESG can feel overwhelming for companies that have not yet taken the first step on their sustainability journeys. Leveraging years of experience working with healthcare companies of all shapes and sizes, I have identified six simple steps companies can take today that are guaranteed to deliver value and save money in the long run.
From large institutional investors to smaller quantitative investors, proxy voting guidelines increasingly reference ESG issues such as board diversity and climate change, requiring companies to meet a minimum ESG performance threshold for investors to vote in accord with management. Companies failing to meet investors’ ESG requirements risk losing key votes and are prone to investor activism.
Based on the increasingly political coverage of ESG (environmental, social and governance) in the media, controversial SEC climate-risk regulation, and national dispute over ESG investing, one might conclude that ESG is a distracting future compliance headache. Regardless, one would miss the point—which is that at its heart, ESG is a tool for value creation.
Let us begin by congratulating Stern IR client Gilead, who ranked highly in this year’s II awards across several metrics, including best investor relations program, best CEO and CFO, and best communication of strategy and risk management amid COVID-19. Go GILD!