The ESG Working Group: Staying on Top of Rapid Change
The Praxity working groups, meeting online and at the Praxity conferences, are an invaluable resource for member firms. Giving firm leaders a chance to workshop ideas and share experience, they’re a huge benefit to the Alliance model, and powerful way to pool knowledge.
Since 2021, the ESG working group has been offering support and guidance in the rapidly changing area of Environmental, Social and Governance. A truly global group, incorporating members from all major regions of the world, the group helps to give an overview of the ESG landscape in different jurisdictions. The group is Chaired by Dick Cockrum, Managing Director of ESG & Climate Risk at Forvis, with Ed Olson, Partner and ESG Leader at MNP as Vice-Chair. Along with a highly qualified and experienced group of members, they are well-placed to explore changes and share insights.
The first question that the group needed to address was to agree on the scope. Action on ESG could be roughly arranged into either what firms are doing or what services they are offering to their clients. While the latter was decided to be the most pressing, the former would also unavoidably feature in the meetings. Another important task for the working group is to explore the many different ESG credentials and third-party ratings that are available, assessing them for merit and sharing what they use in their own firms.
Currently, legislation in ESG is rather behind reality, however rules are coming in, especially in the EU, which will affect the entire global operating environment. The European Sustainability Standards (ESRS), for example, have been adopted as of July 31st, with a dramatic change in how reporting is overseen, also publishing a detailed Q&A on their website. This gives plenty to discuss – how it impacts reporting, what is expected of firms, minimum requirements and more.
Deciding what investors want and what regulators need in terms of ESG is a hugely important area for Praxity member firms, as it is throughout the business space currently. The group members research what is happening behind the scenes at member firms, exploring best practice and examining different workflows. This includes software platforms, as well as how ESG intersects with other aspects of business. Interaction with the Audit teams is of particular interest, as this is an area of changing roles and of dotted lines between practice areas.
Approaches differ across the world too. In the US for example, each state is approaching ESG reporting and investing differently, with federal legislation going back and forth for amendments. In the EU, firms are preparing their clients as best they can for incoming rules, which affect not only EU member states, but subsidiaries and trading partners. ESG is ever-expanding in scope and the working group keep each other informed on what is happening in each jurisdiction.
The working group is an important forum for exploring ESG strategy, both within member firms and for their clients. Workshopping ideas, exchanging thoughts and predicting trends are the function of all the Praxity working groups, with the ESG working group in particular at the forefront of rapid change. Whether discussing incoming stringent EU legislation, federal draft laws in the US surrounding the Green Taxonomy, or how investors are spending their money, being at the crest of the wave is vital.
Want to join the ESG Working Group?
Praxity’s ESG Working Group is open to individuals from any member firm. The Group is always looking for new members and joining is easy. Please contact executiveoffice@praxity.com for more information.