Over the last several months, Ethisphere has been running a working group of Business Ethics Leadership Alliance (BELA) member companies all engaged on ESG best practices. Emily Rickaby, Ethisphere’s Director of Shared Expertise and Strategic Projects, has been coordinating the group, and got a chance to discuss the work they’ve done so far with Marvell’s Roxane Marenberg and Western Union’s Nancy Reynolds.
Emily Rickaby:
Thank you, Nancy and Roxane, for joining me today. Why don’t we start with you both briefly telling us a little bit about yourselves and your role with the ESG program at your organization. So Nancy, we’ll start with you.
Nancy Reynolds:
Thanks for inviting Roxane and me to talk about our ESG programs. I’m the Chief Ethics Officer at Western Union. Western Union is a global leader in cross-border, cross-currency money movement and payments headquartered in Denver, Colorado and we provide financial services for families, small businesses, multinational corporations, and nonprofit organizations, and operate across more than 200 countries and territories. This year, Western Union was included in the 2020 Bloomberg Gender-Equality Index, which I’m especially proud of because diversity and inclusion is a focus for our company overall and our ESG strategy specifically.
I started serving on the ESG working group at Western Union in 2019, and we published our second ESG report in June 2020. I’m passionate about ESG because it highlights the evolving role of the corporation, and is a powerful vehicle to drive stakeholder engagement and support a company’s short and long term business strategy.
Roxane Marenberg:
Thank you, Emily and Nancy, for including me in this discussion. I have been the Chief Compliance Officer at Marvell for almost a year. I came to Marvell about two years ago. Previously, I was the VP of Global Compliance Enablement at Cisco. Marvell has been one of the world’s leading data infrastructure technology companies for 25 years. It moves, stores, processes, and secure the world’s data with semiconductor solutions designed for tomorrow’s enterprise, cloud, automotive, and carrier architectures. ESG is part of my remit as the Chief Compliance Officer. I was recently able to hire a senior program manager for ESG.
We’re in the birthing stages of the ESG program, and I did not have an opportunity in my prior life at Cisco in a compliance function to have involvement in ESG. But like Nancy, it’s been very exciting for me. It’s been a huge learning curve for me, but an exciting one because of the importance that the company has put on corporate social responsibility and sustainability.
Emily Rickaby:
Both of you are members of the ESG Working Group through the Business Ethics Leadership Alliance (BELA), where we spent quite a bit of time talking about the various cross-functional members of everybody’s ESG team. What were some take-aways for you as you learned about how other companies were organizing around ESG efforts?
Nancy Reynolds:
The BELA ESG working group has connected me with leading ethics and compliance professionals at global companies to learn how they are navigating ESG issues at their companies. I’ve enjoyed learning about the different ways my BELA colleagues are organizing their ESG efforts and how ESG involvement and sponsorship at the executive and board level are key to advancing and maturing a company’s ESG program.
At Western Union, our ESG working group includes subject matter experts from investor relations, enterprise risk management, ethics, legal, and corporate affairs, and we’re including colleagues from offices around the globe. Our core working team reports out to Western Union leaders, including executives and our CEO, who are actively involved in providing guidance and feedback on our ESG report and strategy.
Last year, we also added ESG to the name and charter of our governance and public policy committee and have joined the more than 123 S&P 500 companies that have assigned oversight of ESG to a board committee.
Roxane Marenberg:
So I would agree with Nancy, that one of the benefits of the BELA working group has been exposure to how companies, in a variety of industries, have common approaches to ESG. There’s a shared recognition that there are so many stakeholders that can all add value and whose interests need to be taken into consideration.
Not only should we include work that’s being undertaken in various countries in which we do business, but also the companies with which we engage, either as partners, customers, in our supply chain, or others stakeholders.
In terms of internal stakeholders, initially I thought I knew who needed to have a seat at the table – for example, it is clear that operations has a role, and the facilities function because they deal with water, waste, and greenhouse gases. But there’s also the need for someone from finance, procurement, legal, marketing, and investor relations—all of these folks help ensure the company has a successful ESG program. We are also fortunate to receive support for ESG efforts at the highest levels in the company, including from the Audit Committee and the Nominating and Governance committee, the latter being specifically tasked with overseeing the ESG program.
Nancy Reynolds:
At Western Union, we’ve made great strides in advancing our ESG program because our CEO, Chief Legal Officer and other senior leaders champion our ESG work, and models how our ESG strategy relates to our short and long term business goals and company purpose. Our senior leadership team also understands the value of ESG in stakeholder engagement and the importance of transparency in developing goals and KPIs that enable us to drive meaningful action on key issues.
It can be a learning curve for a company to be comfortable with transparency. Executives and board members who are new to ESG may have questions or concerns about making public or other external commitments, so it’s important to be thoughtful about the process and provide education and information about the benefits of transparency with ESG.
Emily Rickaby:
Excellent points. Bringing the conversation more specific to the ethics and compliance space, can you talk about what some of the benefits are to having ethics and compliance as part of the ESG work at your organization?
Roxane Marenberg:
Yes. Ethics and ESG go together hand in glove. We’re fortunate to have involvement from a cross functional team handling ethics, compliance and ESG functions in our organization–at Marvell, all of those functions come within the compliance organization.
When you think about being an ethical company, it’s not just the behavior by the employees and following a code of business conduct, but it’s behavior by the company itself.
If you hearken back to the messaging around the importance of a company having a robust compliance program , it’s the same messaging around the importance of having a robust ESG program—it’s integral to our business strategy, fundamental to the company’s long term growth and competitiveness, and as a function, responsible for enabling the business to be ethical and successful. Whether it’s a compliance program or an ESG program, as Nancy said, it is a journey. It’s taking steps along the way to move up the maturity curve, making progress that’s transparent, and being able to measure your successes and challenges.
Nancy Reynolds:
Roxane and I have both helped our companies mature and grow to ensure that our ethics and compliance programs support and reinforce doing business the right way to support our strategic growth as a company. Our ESG work is undergoing a similar journey and we’re seeing how a strong ESG strategy supports our business strategy and purpose—from promoting a diverse and inclusive workplace to driving environmental stewardship. As ethics and compliance professionals, we’re connecting the dots between our ESG and business strategy. For example, we are working on how best to integrate our enterprise risk management program with our ESG reporting and strategy.
Emily Rickaby:
Coming from a compliance or ethics background to work on ESG, where were some areas where you felt you needed to develop skills and knowledge, and what was it that you already had in your own personal toolkit that helped you transition into this ESG space?
Nancy Reynolds:
ESG is a fast-evolving field and it takes time to understand the ESG language, landscape, stakeholders, and ESG rating frameworks and agencies. I’ve had to learn that language but I love learning, especially when I can apply what I’ve learned so quickly. This year, in addition to using the framework provided by the Global Reporting Initiative (GRI)-—which remains the most commonly used ESG reporting framework globally–Western Union’s ESG report also added metrics from the Sustainability Accounting Standards Board (SASB).
This article is part of a series of contributions from the Business Ethics Leadership Alliance’s Working Group on ESG. To get involved with future working groups, contact your BELA Engagement Director, or contact Ethisphere for more information about BELA membership.
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Emily Rickaby:
Coming from an ethics and compliance role, you work with data, reports, and analytics, but also the human story element. You understand there’s real value in the data. But you also know from your training and communication experience that stories go a long way. You need the balance of those two things. People respond to data and information, but stories really resonate.
Roxane Marenberg:
The challenge of reporting out and gathering the right kind of ESG information that will resonate with the audiences, no matter who they are, has been an education for me. I’m not an expert in terms of knowing how to measure greenhouse gases, or water usage, or the metrics around disposal of e-waste and whether it’s hazardous or not. I think that’s where the learning curve has been the greatest for me personally. There are many organizations and functions, however, both internal and external, that have been able to support me in this space.
Coming from an employment law background before compliance, the governance and social aspects were an easier transition for me. The other aspect in assuming ESG responsibilities that was seamless for me was seeing how all three of those buckets – environmental, social and governance – blend into one another. For example, being able to re-purpose used laptops and give them to young women who otherwise wouldn’t have access to the tools necessary to use the internet in far flung areas of the world, is just one example of the “E” and “S” overlapping.
Nancy Reynolds:
As we have created our ESG reports, we have learned more about grassroot efforts of our own employees around the globe on issues like the environment, water conservation, climate control, LGBTQ rights, diversity and inclusion, and support for communities where our customers live.
I see our ESG strategy as a vehicle for the company to take stock of what it’s doing, whether its goals are around the environment, or the social aspect, or the governance perspective, and having clear, tangible steps that you want to take as a company and share with the world. Operationalizing our ESG strategy can help us be more powerful, innovative, and effective as a company and a steward of our resources to help our customers and communities.
Roxane Marenberg:
I love hearing this because it helps answer the question, what’s the ROI on this? How does this help our corporation? How is this going to help our shareholders? If I invest in the ESG program, it’s a similar question that is asked about a compliance program: what is it going to get me? The answer may be easier regarding a compliance program. If you don’t invest in the compliance function, here’s what we’re going to have to spend in defending the company if the SEC or the Justice Department starts investigating a claim against the company and looks at the bona fides of the company’s compliance program
The question in the ESG space, “Who’s going to come after me if I don’t have an ESG program that shows maturity over a period of time?” is a more difficult question to answer in the context of why the company should invest in the ESG program. However, it’s starting to be an easier question to answer given the recent attention in ESG reporting standards.
Nancy Reynolds:
We are seeing more rankings or ratings of companies on ESG-related categories, sometimes regardless of whether you apply for these awards or recognitions. This means it’s important to conduct your own internal assessments and ensure the information about your company that is available to third parties is accurate and up to date. We’re also watching to see what kind of regulations or industry-accepted standards develop to drive more consistency in ESG measurement and assessment.
Roxane Marenberg:
The requests for information about what we’re doing in the ESG space is coming from all angles. It’s not just the raters and rankers in the U.S. Requests come from the customers, the suppliers with which we do business, etc. It’s no longer just the institutional investors determining whether they’re going to invest in your company based upon your disclosures.
Emily Rickaby:
For your ethics and compliance colleagues just getting into the ESG space, where do they start? How do they prepare themselves?
Nancy Reynolds:
Read the ESG reports of BELA members, because they are fun and interesting and you get to see the different approaches companies are taking to the ESG space. There’s not really a right or wrong way to approach this. Our ESG report is one of the best ways to find out about Western Union, and it’s a document I share with our new hires.
Roxane Marenberg:
Yes, I agree. But I would also add read the 10Q, read the 10K, read the proxy statements from the companies. If you’re in ethics and compliance, you’ve participated in sharing some of the risks that may be reflected in those reports already.
Nancy Reynolds:
When you’re in the ethics and compliance roles you probably already have a lot of interaction with other functions, and I would encourage you to get involved in ESG efforts to work with your colleagues and leaders in a new way. I’ve loved the work that I’ve done with my colleagues in communications, risk, investor relations and other areas. I’m a better Chief Ethics Officer because I’m actively involved in connecting the dots between my company’s business goals and purpose and our stakeholder governance and ESG strategy work.
Emily Rickaby:
Anything else you want to bring up about your experience working as part of the ESG team at your company, your role, and the intersection of that with the compliance and ethics space’?
Roxane Marenberg:
Remember, you can’t do everything at once. Similar to putting together a compliance program, you can’t attack every one of the areas where there are gaps, so you have to prioritize. And, look for opportunities for people to put skills and experience to work that they may not have chance to use in their formal roles. ESG may not be in their job title, but it’s an opportunity for them to add value to the program, even in its nascent stage.
The other aspect, I think Nancy addressed this earlier, is that some of this is all new. There are raters or rankers but there’s no one regulator who is going to say, “Okay, I want to see this program element, I want to see this playbook, I want to see this statistic, I want to see this metric.” So there’s a lot of creativity that I’ve been able to bring to the ESG space. And, there’s no one material factor necessarily common to every company that should be prioritized.
Nancy Reynolds:
ESG works allows you to engage with some of the most exciting, evolving topics of the day. For example, we included topics in Western Union’s ESG report this year on our response to COVID-19 and racial and social injustice issues. When you work on ESG, you’re continually linking some of the most dynamic and critical social issues with your business strategy. Our core ESG group is constantly sharing articles that we’re seeing about evolving ESG issues and related events. We’re enjoying the challenge of how to be responsive to ESG related trends and how to lead in the ESG space.
About the Expert:
Nancy Reynolds is the Chief Ethics Officer at Western Union, a global leader in cross-border, cross-currency money movement and payments headquartered in Denver, Colorado that provides financial services for families, small businesses, multinational corporations, and nonprofit organizations in over 200 countries and territories and that was included in the 2020 Bloomberg Gender-Equality Index. Nancy has advised Western Union on employment law and ethics matters for 12 years and currently leads the company’s ethics program.
Roxane Marenberg is Marvell’s Chief Compliance Officer, focused on promoting a culture where compliance and integrity are the norm, and employees are given the tools they need to do the right thing. In her role, she is responsible for internal processes for promoting and ensuring Marvell’s compliance with laws, regulations and company policies. Her portfolio includes Concern Line reporting, internal investigations, policy and procedure development and training programs across the organization, in addition to monitoring to ensure the programs have their intended impact. She also has program and reporting oversight of trade compliance and Marvell’s Environmental, Social and Governance (ESG) program.
