Anti-bribery and corruption programmes have long been a part of corporate risk analysis and clearly play a big role in ESG (Environmental, Social, and Governance) for business that seeks to go beyond only maximising profits.
An Anti-Bribery and Corruption Benchmarking Report by Kroll, a company that provides proprietary data, technology and insights points out that because ESG investments can be undermined by instances of bribery and corruption, ESG compliance and anti-corruption compliance are closely linked. The report was based on a survey of 200 senior risk professionals across the globe.
Bribery and corruption can undermine good company and state environmental and social policies and processes, if standards are ignored by bribed officials.
The perceived risks of bribery and corruption can also lead to trust deficit in a company. This could happen if investors and shareholders feel that its processes and systems are not sufficiently geared to prevent bribery and corruption.
This in turn calls for companies to have a robust Anti-Bribery and Anti-Corruption program that will reflect positively on a company’s ESG compliance.
The value of ESG with relation to anti-bribery and anti-corruption
ESG is often more highly valued among younger investors, but its influence can be seen across all sectors. According to Moody’s investor service, inflows into ESG products rose 140% in 2020, and the Global Sustainable Investment Alliance found that sustainable investment across the global investment industry increased by 15% between 2019 and 2020 to reach $35 trillion assets under management.
ESG has become an important approach to business that seeks to go beyond only maximising profits. ESG assessments evaluate a company’s performance on environmental, social and corporate governance issues and thus inform investing decisions.
ESG with relation to anti-bribery and anti-corruption aims to evaluate a company’s policies and actions in combating corruption. Although incorporating anti-corruption is important, the diversity between ESG providers and their reliance on company’s voluntary disclosure of information has meant these standards currently only give part of the picture.
There is a view that ESG is something only big organisations should, and are, focussing on. However, customer and supply chain pressures are now driving the message of ESG down the supply chain of larger organisations, requesting reference to ESG strategies from their SME suppliers.
Larger organisations are requesting this information and are looking for alignment with their own ESG strategy. In short, they want to ensure that the products and services they are procuring help them achieve their ESG ambitions. SMEs need to respond to this to secure commercial opportunities. Regulators and investors will demand it.
The most promising progress is moving towards a global baseline of standards. Anti-corruption and what companies should do and report on this regard should be a central point when developing this baseline.
The importance of ESG with relation to anti-bribery and anti-corruption, in driving the country’s economy forward
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- Environmental, Social and Governance (ESG) has become a fundamental approach to business that seeks to go beyond only maximizing profits. ESG assessments evaluate a company’s performance on environmental, social and corporate governance parameters and lead to informed investing decisions. It also evaluates a company’s policies and actions in combating corruption.
- ESG, anti-bribery, and anti-corruption are closely linked as bribery and corruption can undermine a company’s ESG policies and processes if bribed officials ignore standards. The perceived risks of bribery and corruption can also lead to a trust deficit in a company. This could happen if investors and shareholders feel its processes and systems are not sufficiently geared to prevent bribery and corruption. This, in turn, calls for companies to have a robust Anti-Bribery and Anti-Corruption program that will reflect positively on a company’s ESG compliance, leading to corporate growth. This, in turn, will propel the nation’s economy.
- Although incorporating anti-corruption is essential, the diversity between ESG providers and their reliance on the company’s voluntary disclosure of information has meant these standards currently only give part of the picture.
Where are you on your ESG journey?
ESG can be highly complex to embed into your existing processes and procedures. However ISO Certification can help boost ESG Compliance. For example, a sustainable business process framework might include ISO 37001: 2016 Anti-Bribery Management System standard. This standard provides a framework for implementing reasonable and proportionate measures to prevent bribery and corruption. These measures involve top-level leadership, training, bribery risk assessment, due diligence adequacy, financial and commercial controls, reporting, audit, and investigation.
ISO 37001 isn’t the only standard that addresses these risks; take ISO 37301:2021 Compliance Management Systems. CMS helps organizations to comply with the legislation that is applicable to them and with the commitments assumed by their stakeholders. They reduce the economic or reputational risks of failing to comply with them and are a fundamental tool for organizations to comply with their corporate social responsibility policies. They undoubtedly help to create a culture of integrity and compliance that fosters sustained success and the organization’s survival.
One of the many benefits of ISO certification is that it is designed to fit together like a puzzle. If you are certified under, for example, ISO 37000:2021 Governance of Organizations, you will be familiar with ISO 37002:2021 Whistleblowing Management Systems.
All ISO standards have in common their ability to help organizations achieve greater profits by managing the processes.
Explore more with the Transparency International Anti-Corruption Helpdesk Answer: Anti-corruption in ESG standards.
About ABAC™
Anti-Bribery Anti-Corruption (ABAC™) Center of Excellence is an independent certification body that provides education and certification services for individuals and organisations on a wide range of disciplines and ISO standards. ABAC™ offers a complete suite of solutions designed to help organisations mitigate the internal and external risks associated with operating in multi-jurisdiction and multi-cultural environments while assisting in developing frameworks for strategic compliance programs.
ABAC Group™ is accredited by the United Kingdom Accreditation Service (UKAS CB number: 10613) against ISO/IEC 17021-1:2015 Conformity assessment — Requirements for bodies providing audit and Certification of the scheme’s management systems of ISO 37001:2016 Anti-Bribery Management Systems (ABMS). This makes ABAC™ Certification the leading accredited certification body specialising in global anti-bribery and anti-corruption, risk and compliance management system standards.
ABAC™ experts audit any existing compliance and anti-bribery anti-corruption management systems to assess effectiveness and vulnerabilities while ensuring your organisation complies with Internal Standards, FCPA, U.K. Bribery Act, Anti-Money Laundering regulations, and all other global, regional and local regulations while maintaining a competitive edge in the world marketplace.
If you seek to validate or expand your existing compliance frameworks to maintain a competitive edge in the world marketplace, ABAC Group™ can help you. Our experts audit your existing compliance and anti-bribery anti-corruption management systems to assess effectiveness and vulnerabilities while ensuring your organisation complies with Internal Standards, FCPA rules, U.K. Bribery Act laws, Anti-Money Laundering regulations, and all other global, regional and local regulations.
