By Andrew Ciafardini, chief sustainability officer at FIS
Investor interest in ESG is exploding. While not a new topic to IR professionals, the importance of ESG has grown exponentially over the past two years, driven by the ever-growing expectations and influence of an expanded set of stakeholders, including employees, customers, regulators and non-governmental organizations.
More than ever, these ESG-focused stakeholders are working in unison to drive companies to address climate change, advance diversity and inclusion, and tackle other issues making headlines today. Making things complicated is the plethora of shifting and emerging ESG standards and regulations that various stakeholders expect companies to align with.
What do IR and ESG professionals need? To succeed in this evolving landscape, IR and ESG professionals need to be agile. Certainty around ESG frameworks, market regulatory standards and global consensus on how to compare companies across geographies is not likely to be firm for years to come. There is no magic compass to guide the way but there are things you can do to help navigate the ambiguity of this period.
While FIS is relatively new to our sustainability journey, there are a few strategies that have helped us move the needle in our ESG program over the past year. We think employing these foundational principles might be helpful to others embarking down the sustainability path.
Trying to align your ESG reporting with every framework or completing every ratings agency questionnaire will only result in an unmanageable reporting nightmare. Engage key ESG stakeholders regularly to understand what their expectations are, then focus your reporting and internal ESG program efforts on addressing those topics. Expectations from investors and other stakeholders can vary significantly from what any particular ratings agency wants your company to focus on. It's important to listen to all voices that reflect your stakeholder group, not just those that are loudest.
Meeting stakeholders’ ESG expectations should be a team sport at your firm. Recruiting and involving all parts of the business is vital to ensure that you can properly collect and validate ESG data and to help tell your company’s sustainability narrative. By engaging colleagues, you can more quickly scale your sustainability efforts and amplify your internal and external communications efforts, enhancing your sustainability reputation.
While most ESG disclosures are voluntary today, the future will certainly require more mandatory disclosures established by new laws or regulations. ESG disclosures that are likely to be codified into law should be a key area of focus. Helping prepare your company for the eventuality of these disclosures will make it much easier for the organization to comply when it becomes required.
No one knows how the next five years of sustainability reporting will unfold, but we know that it will require agility to navigate. And by putting stakeholders first, making ESG a team sport and focusing on emerging regulation, there is no doubt you will be focused on the right things. For more information, please contact esg@fisglobal.com.
FIS is a leading provider of technology solutions for merchants, banks and capital markets firms globally. Our employees are dedicated to advancing the way the world pays, banks and invests by applying our scale, deep expertise and data-driven insights. We help our clients use technology in innovative ways to solve business-critical challenges and deliver superior experiences for their customers. Headquartered in Jacksonville, Florida, FIS is a Fortune 500® company and a member of Standard & Poor’s 500® Index.
To learn more, visit www.fisglobal.com. Follow FIS on Facebook, LinkedIn and Twitter (@FISGlobal).
