1. ESG Can Use ERM’s Structure and Processes
ESG frameworks often lack implementation guidance.
ERM offers mature practices, standards, and structure.
ESG objectives can be layered into ERM cycles: goal-setting, metric tracking, and improvement initiatives.
Risk-based ESG frameworks align naturally with ERM foundations.
2. Leverage ERM’s Organizational Support
ERM has stronger board and executive buy-in.
ESG can “piggyback” on ERM’s reporting and visibility.
ERM managers have proven strategies for cross-department collaboration — useful for ESG rollout.
3. Efficiency, Savings & Demonstrated Benefits
Integration reduces duplication and streamlines ESG efforts.
ESG and ERM programs often face funding challenges — integration strengthens their case.
Studies show a strong correlation between ESG/ERM maturity and financial outperformance (e.g., Friede et al., 2015; Farrell & Gallagher, 2014).
4. Reframing ESG Objectives as Risks
Treat ESG goals as risks to be managed rather than aspirations.
Use risk bow tie diagrams:
ESG goal in the center
Root causes on the left
Consequences on the right
Pre- and post-event mitigations guide proactive planning
Combine with real-time indicator tracking to adjust course before annual reporting.
5. ESG Can Invigorate ERM Programs
ESG brings energy and purpose to ERM.
It helps shift ERM from compliance to objective-focused culture.
Even without a formal ERM program, ESG can be a catalyst to launch one.
Keywords: ESG integration, risk bow tie, indicators, shared structure, ERM value, cross-functional risk, proactive planning