Armstrong Wolfe are looking to establish the current roles and responsibilities of the COO where they relate to managing and interacting with their organisation’s ESG strategy, and to offer a possible framework of solutions to facilitate productive ESG management.
In 2022, Armstrong Wolfe launched an ESG data management programme with our alliance partner Sutherland. From this programme, we concluded three things:
- The ESG COO role is maturing, and more needs to be done to define an ESG COO’s roles and responsibilities.
- The role of an ESG COO is to quantify, qualify or certify the data points and create due diligence around the supply chain and an ecosystem around governance.
- Financial services organisations are reliant on financial market transactional risks versus seeing sustainability as a strategic risk. The ESG COO role would potentially lower the risk of talent attrition.
Definitions
ESG (environmental, social, governance) refers to client activities.
CSR (corporate social responsibility) relates to corporate activities.
These concepts meet when a bank reports and communicates to stakeholders and shareholders on its ESG activities and CSR performance.
The evolving role of the COO
A COO who manages ESG strategies or is accountable for ESG strategies ought to display certain characteristics:
- A strategic mindset
- Ongoing daily board presence
- A conduit of multiple strategies across global organisations that are knitted together into a value set.
The COO is in a unique position to manage transformation and co-ordinate ESG strategies.
Keynote Speech: Lila Karbassi, Senior Officer at United Nations Global Compact and Chair Executive Board, SBTi
Trends
Since the pandemic, more organisations are signing off on sustainability initiatives as they are considered a tool for businesses to manage their long-term risks, operations and to navigate uncertainty. In parallel to this, there is greater demand for transparency and accountability. Furthermore, many organisations are concerned they may disclose too much, and be exposed to allegations of greenwashing.
