- Forética's 'Action Group on Sustainability and CSR in Public Companies', made up of 27 public entities and headed by Adif and ICO, delves into the early identification and management of ESG risks (environmental, social and good governance) in an environment marked by the current crisis COVID-19
- Given the nature and positioning of public companies, it is essential to address the integration of non-financial risks in their traditional risk maps, in order to anticipate and mitigate potential disputes affecting the value, purpose and continuity of the entities.
Madrid, July 13, 2020.- The 'Action Group on Sustainability and Corporate Social Responsibility (CSR) in Public Companies', led by Forética and made up of 27 member entities - headed by Adif and the Official Credit Institute (ICO) - analyze ESG (environmental, social and governance) risk management in an environment marked by the current COVID-19 crisis.
"In the development of sustainability and CSR strategies in public entities, one of the fundamental levers to incorporate is ESG risk management. The early identification, evaluation and mitigation of this type of risk - increasingly frequent in the current global context - helps to preserve the value of companies and to be less vulnerable in crisis situations, enhancing their long-term sustainability," says Germán Granda, CEO of Forética.
"ESG risks are those related to the inadequate management of environmental and social performance or derived from the poor governance of organizations, which can lead to the destruction of the value of companies. In its study 'The Value of Governance: Increasing returns through extra-financial management', Forética analyzes a total of 52 ESG shocks related to climate impacts, customer fraud, corruption or violation of human rights that entailed economic losses greater than the current value of the IBEX 35. Most of them are due to poor management of sustainability aspects or putting the short term before the true purpose of the entities to create long-term value in society. Given the nature and positioning of public companies, it is essential that they integrate ESG risks into their traditional risks to avoid the emergence of controversies that put the value and continuity of the company at risk", adds Jaime Silos, Director of Corporate Development and Director of the Transparency, Good Governance and Integrity Cluster of Forética, who was responsible for giving this 'Workshop on ESG Risks in Public Companies'.
This workshop also included the intervention of Jerusalem Hernández Velasco, Director of Sustainability and Good Governance at KPMG, who analyzed the methodological procedure for identifying and assessing ESG risks -including reputational risks-, the preparation of the ESG risk map and its integration into the traditional corporate risk structure.
For its part, Enagás shared its business experience with the intervention of Carlos Ruiz Alonso, Director of Sustainability and Risks, who explained the current risk map of the company, how it has been configured, and how the environmental, social and reputational impact is taken into account when assessing the different risks of the company in terms of probability and severity.
Addressing a sound sustainability strategy in public companies
"The objective of this Action Group led by Forética is to address a solid Sustainability strategy in public companies. Throughout this year we will put special focus on promoting the Circular Economy in public companies, on the identification and management of non-financial risks, and on giving continuity to the contribution of the public company in society, through the development of corporate volunteering programs", comments Ana Gómez, head of this Action Group at Forética.
This 'Action Group on Sustainability and CSR in Public Companies' is a collaborative business platform that aims to promote the exchange of knowledge among participating public companies on environmental, social and good governance issues, transferring relevant tools and trends at the international level and contributing positively to the leadership of Spanish public companies in this field.
The Group, coordinated by Forética, has the support of Adif and ICO as leaders and a total of 27 public entities as members: Aena, Aquavall, CESCE, Corporación Empresarial Pública de Aragón, Correos, Emasesa, ENAIRE, Enresa, Grupo ENUSA, Extremadura Avante, Giahsa, Grupo Tragsa, ICEX, INECO, INFORMA D&B, ISDEFE, ITVASA, Metro de Madrid, Navantia, Paradores, Renfe, RTVE and Valenciaport. Cofides and the Red Nacional Sanitaria de RSC participate in the Group as observer members.
More information about the Task Force here