How do you measure the impact of ESG initiatives on the company’s overall performance and reputation?

Regarding the impact of ESG initiatives on a company’s overall performance and reputation, there are two main perspectives. On the one hand, I believe that investing in ESG initiatives will pay off, simply because, much like compliance management systems, a company cannot afford to ignore them. ESG initiatives play a crucial role in safeguarding and cultivating a company’s reputation and image. With the transparency enabled by global digitisation and social media, maintaining a positive image has become increasingly vulnerable, making it more important than ever to actively manage it.

On the other hand, the EU Green Deal introduces numerous new regulatory requirements for businesses, raising doubts about whether the efforts required for compliance can be balanced appropriately with achieving ESG goals, particularly for SMEs.

Given the growing importance of ESG, I am convinced that all members of management have a responsibility to promote these initiatives. This marks a shift from focusing solely on financial performance to considering the broader impact of a company’s actions on people and the planet. The legal department, and particularly I as General Counsel, play a vital role in this process. In my role, I participate in various management and supervisory board meetings with shareholders, which provides me with a unique opportunity to influence the opinion-forming process.

As previously mentioned, from my perspective, the primary legal challenge for businesses lies in the increasing regulatory requirements. The only realistic approach to managing this challenge is to utilise as many IT solutions, including AI, as possible.