Page 13 - DIY Investor Magazine | Issue 34

New and prospective laws within the EU, and other non-EU countries, are now focusing on introducing mandatory ESG due diligence requirements for companies.
The aim is to ensure measures are taken to prevent adverse impacts on human rights, while ensuring there is good governance in supply chains and business relationships.
This poses a risk for UK companies, especially those with an international footprint; addressing potential weaknesses at the earliest opportunity could avert future scandals, reputational damage and reduced investor confidence.
HOW TO IMPROVE ‘S’ EFFORTS
For companies whose products and services may not be directly aligned to an SDG, we believe management teams could consider the following measures to improve their ‘S’ efforts:
Important information
• Consider what the firm stands for and adopt a business code of ethics;
• Create Employee Resource Groups aimed at promoting exclusivity across the organisation;
• Provide employees with volunteering days to give back to the community;
• Find organisations to work with to tackle issues that matter to customers. Set aside a proportion of the annual budget to fund charitable efforts.
This list may help guide companies, particularly SMEs, in the right direction; investors can actively engage with companies to drive positive societal outcomes, and use their proxy voting power to veto management teams and boards that fail to meet their commitments or goals. Securities mentioned are for illustrative purposes only and not a recommendation to buy or sell.
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DIY Investor Magazine · July 2022