ESG Matters in Crisis Management: Incorporating Environmental, Social and Governance Principles

Incorporating ethical environmental, social, and governance (ESG) principles can, and should, be a consideration when a company drafts its crisis management plan.

The Why

Aside from the societal good that may result, implementing ESG principles into a crisis management plan may also serve to safeguard the reputational and financial strength of a company by reassuring investors and consumers about the values and direction of the company.     

Regulators, investors, and the public at large are paying closer attention to ESG matters and requiring companies to be ethical citizens both locally and globally. These demands do not stop when a company is confronted with a crisis. Rather, the company is watched more closely. If a company shirks ESG principles, there is a risk for increased reputational harm. The damage to public image, in turn, may lead consumers and investors to move away from the company and may gain the attention of regulatory enforcement. 

The How

ESG considerations can all be factored into an effective crisis management plan and response. First, being conscientious about how the plan is stored and distributed and how the response team will collaborate can limit the environmental impact of crisis response. Second, ensuring that the response team is comprised of individuals from varying backgrounds and levels of experience will lead to increased creative problem solving and ensure a more fulsome understanding of the issue at hand. Third, governance principles such as transparency can help to limit the scope of the crisis and allow the company to quell fears more quickly.

Learn more about why and how to incorporate ESG into crisis management planning and response.