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Template Environmental, Social & Governance Strategy

CO.CEP.07

This is a template Environmental, Social & Governance (ESG) strategy paper that a SME may wish to put in place, commensurate with its size and sector focus, setting out the type of organization that it aspires to be. It is by its very nature, generic, but highlights the key areas that businesses should focus on when determining their ESG strategy, including carrying out an ESG audit and putting in place new ESG policies, practices and processes.

ESG is a broad umbrella term that includes factors from climate change and environmental conscientiousness and sustainability to social aims and responsibilities. It is increasingly being seen as a top priority for businesses and, considering this, companies must have an awareness of their own wider impact on society and the environment in which they operate, and have a strategy in place to address this.

Currently SMEs are outside the scope of any specific ESG related disclosures in the UK, however, failure to tackle ESG issues that are relevant to SMEs may lead to, amongst other things, regulatory enforcement as well as posing a litigation, physical, commercial, financial and reputational risk to the company that might adversely affect its sustainability and resilience.

Considering this and the growing trend for ESG requirements and compliance as a pre-requisite for contracting with other parties, this template can be used as a starting point to set out a company’s ESG strategy. It allows the company to explain their ESG strategy and what practices, processes and policies they are putting in place as part of this.

This template is in open format. The requisite details should be inserted into the highlighted fields or the wording can be adjusted to suit your purposes. Wording in square brackets is optional. If it is required, then the brackets should be deleted and the wording within them retained. If the wording is not required, then it can be deleted.

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