erm enables esg

how good ERM enables your ERM strategy

ERM supports ESG
well implemented ERM supports ESG

I pick up the proverbial trail from our April blogpost trying to make a connection between ESG and ERM. Specifically, I outline a set-up in which ERM enables ESG.


ESG finally is getting the attention the topic deserves. The concept was developed a few decades ago by the United Nations. However, for a multitude of reasons it stayed in the shadow for way too long. I outlined some key features of ESG in a previous post and the accompanying VLOG on Youtube.

Now in 2021, many organizations are keen to embrace ESG. Sometimes though, it appears challenging “where and how to start” the journey. After all, ESG affects each and every aspect of any organizations’ undertakings, no matter how simple or complex they are.

I outline a simple recipe how your organization can successfully start the journey, embed ESG and how ERM will contribute to successfully devising and implementing your ESG-journey.

ERM supports ESG

to state the obvious: it is this way ’round and not the other way..



It is crucially important to develop and agree to a common understanding what ESG is and what it means for your organization. It really is vital to have clarity with respect to terminology. This ensures alignment and facilitates the buy-in from stakeholders.

No need to re-invent the wheel, plenty of particularly good material is available from the well-known thought leaders. No need to re-invent the wheel, plenty of particularly good material is available from the well-known thought leaders.

steps in understanding ESG
Fig. 1: ERM is key to strategy development!

Develop an ESG strategy that does make an impact. Specifically, your final choice will end up somewhere in the continuum between minimal compliance and full integration with strategy and short-term plans (see Fig. 1). Only the latter approach will create true competitive advantages. Organizations currently have significant freedom when deciding on their preferred landing spot within this continuum. This freedom comes handy at this stage, however it also creates uncertainty and possibly frustrations amongst stakeholders.

Enterprise Risk Management is the key tool in this step. Specifically, risk-based considerations about the upside and the downside of your ESG strategy will contribute to sound decision making.

… a well-PACED ERM approach will uncover opportunities and the downside risks of your ESG strategy …

risk creates opportunity

The ESG-strategy translates into tangible plans and actions across business activities, such as products, sales, operations, and asset management as outlined in Fig. 2. Specifically, a proportionate, comprehensive, dynamic, and well-embedded ERM framework will support the ESG implementation across all activities.

Fig. 2: embed an ERM framework to support execution


In a nutshell, an efficient and well integrated ERM framework will support your ESG-strategy from the initial stages all the way to implementation. In other words, good ERM enables ESG!

The consultants at Megrow have in depth experience and a well-founded track-record in strategy development and implementing highly efficient and effective ERM-frameworks. Contact us via the links below in case you would like to know more.