The S in ESG: Don Gerritsen (Deloitte)

August 21, 2023

S van ESG ESG

Don Gerritsen (foto archief Deloitte) 980x600.jpg

^{This article was written in Dutch. This article is an English translation.}

By Don Gerritsen, Strategy Director and Responsible Investment Leader at Deloitte

How can investors interpret the S of ESG?

'The market for responsible investment is relatively young. The term ESG was introduced in 2004. That is less than 20 years ago. Of course, attention to ESG-related topics was already there before. Governance has always been an important consideration in investment decisions. Over the past 20 years, attention to E, environmental issues, has also increased significantly. Social themes, such as human rights, have only really appeared on the agenda of institutional investors in recent years. This trend has been reinforced, among other things, by the materiality of social themes from a double materiality perspective – as prescribed by the CSRD, the upcoming social EU Taxonomy and stakeholder dynamics around social themes.

In order to adequately place these themes on the agenda, it is important that investors translate the most material social themes on at least three levels in their organisation. First, the business and investment strategy: 'How do we translate the most material social themes into concrete opportunities for the organization?' Second, the operational model of the organization: 'Who is accountable and responsible? What does the value chain look like downstream and upstream? How do we ensure optimum employee satisfaction?' And finally, the investment practice itself: 'How are social themes measured and valued? How are these themes integrated into investment decisions?' In this way, social themes get the attention they need.'