Do Your ESG Initiatives Open the Door to Fraud?

Within a relatively short period, corporate environmental, social and governance (ESG) initiatives evolved from a disjointed and confusing set of goals to a more unified business imperative. This is largely because investors, employees, customers and other stakeholders have demanded it. But as companies ramp up ESG spending and require executives to meet ESG objectives, the likelihood of fraud also increases. Although the SEC has created a Climate and ESG Task Force, there’s currently little regulatory guidance related to ESG and fraud. Therefore, your business needs to be proactive. Broad range of goals When designed and managed strategically, ESG initiatives target a broad range of goals — for example, they reduce environmental impact, increase workforce diversity and require transparent accounting methods. Yet, despite your organization’s best intentions, fraud can...