Growing Impetus to Anchor ESG Strategy in Good Governance

FRA Head of Nordics Viktor Josefsson spoke to leading Swedish business and financial publication Dagens Industri about the importance of companies incorporating Environmental, Social and Governance (ESG) considerations into their wider business strategy. Below is FRA’s translation of the original article published in Swedish by Dagens Industri here.

The Growing Emphasis on Choosing Ethical Companies

Companies are increasingly expected to show the world that their organization is focused on analyzing and reducing its environmental impact and strengthening its social responsibility. In order to succeed in attracting the right employees and create sustainable growth, a proactive ESG strategy with a strong focus on corporate governance and coordination across the company is required.

Working towards becoming a more sustainable company is now essential for organizations that aim to succeed in the future. In addition to stricter regulatory requirements, customers, suppliers, partners, employees, and investors are increasingly prioritizing sustainability.

”Having an ESG strategy is, therefore, a necessary measure. The fundamental building block for a successful ESG strategy involves establishing effective governance and leadership structures. While developing initiatives is crucial, success hinges on diligent follow-up, progress measurement, understanding the results of efforts, and ensuring that everything aligns with a coherent vision,” says Viktor Josefsson, Head of Nordics at Forensic Risk Alliance.

Being able to showcase an organization's environmental and social impact is becoming increasingly important to building a long-term sustainable brand.

”Focusing on ethics and compliance is incredibly important for creating long-term success. Such efforts positively impact the company's reputation, foster the development of a positive work environment, and increase investor confidence. Companies that  neglect these aspects are more likely to experience financial losses, damage to their reputation, regulatory issues, and potential litigation,” says Viktor Josefsson.

Stricter regulatory requirements

The requirements to ensure regulatory compliance are becoming increasingly complex in today's globalized world. Simultaneously, a stricter enforcement of regulations is becoming more apparent in Sweden, which has lagged behind in comparison to, for example, the United States and the United Kingdom.

”As ESG compliance gains higher priority on regulator agendas, organizations increasingly face the risk of fines and penalties. These risks can be minimized by investing in a risk-based, technology-adapted approach that aligns with international best practices,” according to Viktor Josefsson, who, with his deep expertise, has been involved in the design of CSRD/ESG disclosure requirements.

FRA assists its customers in adopting both preventive and reactive measures when unforeseen events occur, leveraging today's advanced technology. This enables a risk-based, technology-adapted approach that is customized to the specific needs of the company and aligns with international best practices.

”Today, companies have no alternatives; they must invest in more preventive measures. Through our niche operations, we ensure to stay at the forefront of the compliance area, monitoring developments in various industries and countries. This commitment allows us to truly support our customers, whether it's in preventive efforts or assisting them in acting swiftly and navigating correctly when irregularities arise,” concludes Viktor Josefsson.