Page 580 - COSO Guidance

2. Strategy and objective-setting for ESG-related risks

Table 2.8: ESG-specific resources or tools for understanding the business context

Resources Application
CEO Water Mandate Aims to mobilize businesses to advance water stewardship and sanitation practices by creating a
forum for corporate water discussions and access to water stewardship resources that cover areas
such as operation, context, strategy, engagement and communication
50
CDP Runs a global disclosure platform that enables companies to measure, manage and self-report on
their environmental impacts; offers specific disclosure platforms for climate, water and forest
impacts with companies completing and submitting the CDP questionnaires on an annual basis
51
Context-Based Uses metrics to help companies assess their impacts on vital capitals in relation to what they would
Sustainability need to be in order to be sustainable, taking into account factors such as the needs of stakeholders,
52
the sufficiency of these capitals and competing uses of these capitals
Embedding Project’s “The Provides an understanding of how to factor social and ecological limits into corporate strategy
Road to Context: and goal-setting processes as well as helping make sense of the different frameworks and tools
Contextualizing your designed to aid this process q,53
Strategy and Goals: A Guide”
The Equator Principles Provides a risk management framework, adopted by financial institutions, for determining,
assessing and managing environmental and social risk in development projects; it is primarily
intended to provide a minimum standard for due diligence and monitoring to support responsible
risk decision-making
54
Greenhouse Gas Protocol Provides a framework and assessment tool for companies measuring their carbon footprint in terms
of scopes 1, 2 and 3 greenhouse gas emissions
r,55
The Future-Fit Business Offers a set of indicators for supporting companies in determining the gap between their current
Benchmark performance and where their performance needs to be in relation to key threshold(s)
56
Human rights impact Provides guidelines, in-practice examples, HRIA levels and steps for understanding human
assessment (HRIA) rights-based risks and opportunities
57
Life Cycle Analysis Offers an approach to support a systems-based identification of the socio-ecological impacts of
products and processes; the assessments typically account for all the inputs and outputs throughout
the life cycle of a product (design, raw material extraction, production, use and disposal or reuse)
58
MultiCapital Scorecard Seeks to support the development of a contextual approach to sustainability reporting that
measures an organization’s impacts on vital capitals relative to organization-specific norms or
standards for what they should be in order to be sustainable
59
Net Positive Aims to support companies in achieving net gains with respect to a threshold stemming from their
business activities
60
Natural Capital Protocol Offers a variety of tools ranging from frameworks to measurement approaches to help companies
Toolkit and Social Capital & understand and then assess impacts and dependencies of natural and social capital 62
61
Human Protocol Toolkit
Planetary Boundaries Identifies nine tightly coupled processes that regulate the stability and resilience of the Earth’s
economical system boundaries and, for each of these systems, attempts to quantify the boundaries
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at which human survival is threatened (for more information, see Appendix IV)
The Alliance for Water Provides a globally recognized standard and framework that enable water users to correctly select
Stewardship appropriate catchment boundaries and understand their use of water and their impact on water
within a catchment context; the standard encourages users to expand their collaboration and be
more transparent in their disclosure
64
The Doughnut of Planetary Together with the Planetary Boundaries framework, helps to introduce the role companies play in
Boundaries and Social maintaining and enhancing social resilience or, conversely, how their actions contribute to social
65
Foundations instability in the regions where they operate (for more information, see Appendix IV)
The Living Planet Index Aims to measure the state of the world’s biological diversity and uses the trends in the populations of
vertebrates living in terrestrial, freshwater, and marine habitats; its database holds time-series data for
over 18,000 populations that are aggregated to produce indices of the state of biodiversity
66
WRI Aqueduct Helps map water risks and opportunities emerging worldwide
67
Alignment to strategy and business objectives
Guidance
The COSO ERM Framework emphasizes the importance of
integrating ERM with strategy and objective-setting to provide
an organization with insight into the risk profile associated with Throughout the risk management
68
its strategy and business objectives. Doing so guides the process, align with the entity’s
organization and helps sharpen the strategy and the activities strategy, objectives and
risk appetite
necessary to carry it out.

. . . . . . . . . . . . . . . .
q Some of the resources referenced in this report are provided in this table or Appendix III. This guide also provides further resources not included here.
r In accordance with the Greenhouse Gas Protocol, scope 1 refers to direct GHG emissions occurring from sources that are owned or controlled by the company, scope 2
accounts for GHG emissions from the generation of purchased electricity consumed by the company and scope 3 allows for the treatment of all other indirect emissions.
Enterprise Risk Management | Applying enterprise risk management to environmental, social and governance-related risks • October 2018 33