The perfect is the enemy of the good when beginning one’s journey into environmental, social, and governance performance, says CalPERS private equity lead for ESG and co-investments Julia Jaskólska. The quickly proliferating number of frameworks can be overwhelming for investors and companies alike. But “starting simple and iterating over time” is a tried-and-true method to hone a set of policies that works for your own culture.
“The first message I would have is not to be discouraged because ESG is such an emerging field,” Jaskólska says. So emergent that even established players like the United Nations’ Principles for Responsible Investing (UNPRI) are still working on tools to create a common denominator for target company evaluation.
Earlier this month, UNPRI’s head of fixed income Carmen Nuzzo told us that a comprehensive contribution to the race for an authoritative ESG data framework has to simplify the data reporting process for companies and GPs. Currently circulating frameworks can provide starting points—what key performance indicators are already being asked for? Which of these are the most practical for smaller scale companies to supply?
“Finding which elements of ESG are relevant for your organization,” is a great place to start, Jaskólska says. Values and priorities should be different in a diverse corporate landscape, and will require varying resource commitments to hit those goals once defined.
The shift in corporate thinking continues.
–Brandon Zero
