What Role Should Compliance Play in ESG?
By Bernadine Reese and Jackie Sanz
Regulators and many other stakeholders are intently focused on how financial institutions address environmental, social and governance (ESG) matters. Within financial institutions, boards of directors, executive management and much of the C-suite are weighing in on the ESG strategy and approach. Chief compliance officers (CCOs), though, have been remarkedly silent. This void raises the obvious question “What role should Compliance play in ESG?”
Compliance officers are no strangers to managing complexity in global regulatory requirements and implementing multijurisdictional programs.
Regulatory scrutiny and enforcement action regarding promotional practices have increased in many jurisdictions, with greenwashing being an obvious target. Compliance, as part of its business-as- usual monitoring activities, will need to integrate ESG considerations. For example, the scope of marketing and sales communications will expand beyond ensuring that disclosures are not misleading and are supported by appropriate records to evaluating ESG-related claims. This broader scope will include ensuring that there are no instances of greenwashing and that messaging is supported by fact and aligns with associated regulatory- based disclosures.
Bernadine Reese is a managing director in Protiviti’s Risk and Compliance practice. Based in London, Reese joined Protiviti in 2007 from KPMG’s Regulatory Services practice. Reese has more than 30 years’ experience working with a variety of financial services clients to enhance their business performance by successfully implementing risk, compliance and governance change and optimizing their risk and compliance arrangements. She is a Certified Climate Risk Professional.
Jackie Sanz is a managing director in Protiviti’s Risk and Compliance practice. Based in Toronto, Sanz has been the chief compliance officer, chief privacy officer, chief anti-money laundering officer and senior complaints officer of an international asset manager and fund company with locations in Australia, Canada, Hong Kong, Ireland, Peru, Singapore and the U.S. She has also played the same role for a Canadian trust company. Sanz spent three years in Luxembourg focused on société d’investissement à capital variable (SICAV)/fonds commun de placement (FCP) for offshore distribution as well as Cayman Islands and British Virgin Islands funds.
Protiviti’s Global Financial Services Industry practice has served 80% of the world’s largest banks and many of the largest and mid-sized brokerage and asset management firms, as well as a significant majority of life, property and casualty insurers. The FSI practice provides support to teams across Protiviti’s portfolio of solutions, including regulatory compliance, risk management, internal audit, technology, cybersecurity, data privacy and sustainability.
Protiviti’s ESG practice offers expertise and support across multiple ESG topics, using our ESG framework outlining challenges, risks and opportunities, and stakeholder impacts. Our ESG framework informs our approach to helping institutions and enables a holistic approach tailored to institution-specific requirements. Protiviti’s ESG practice can support institutions with ESG assessments, including ESG frameworks, ESG data management, ESG internal controls and ESG capability maturity assessments.