ESG is the new approach to corporate social responsibility, based on the notion that companies integrating ESG goals into their business decisions and operations are stronger by having accounted for concerns that create liabilities or risk. The financial services community is increasingly relying on ESG ratings and rankings to steer investments.
Today, many IPC members that are public companies have ESG programs and are performing ESG-related data collection and reporting. In many cases, reporting obligations are increasingly flowing down to their suppliers. Our conversations with members indicate they are feeling increasing pressure to achieve ESG standards and reporting requirements, with pressure coming from investors, customers, and the government. Their chief concerns relate to reporting burdens, increased costs, lack of clarity, and regulatory and reputational risk. What is troublesome is that only 25% of the company executives we spoke with felt their company had a strong understanding of ESG.
ESG is likely to impact all companies directly or indirectly, and at the behest of our industry, IPC was asked to help provide much needed navigation on the ESG terrain. At IPC APEX EXPO, we launched an “ESG for Electronics” initiative to develop guidance that advances an industry-specific approach to ESG practices and reporting. A working group of electronics manufacturers is being formed, and the industry can expect to see the product of their work as early as this summer. This initiative will marshal IPC resources and capabilities in standards, workforce, research, and advocacy to achieve industry-backed ESG goals related to environmental stewardship and workforce opportunities.
I look forward to a conversation about this latest issue facing our industry. Please reach out and let me know if your company undertakes ESG reporting, if you’re concerned about the effect of ESG on your business, if you believe industry collectively should do more to support ESG goals, if you seek greater industry opportunities to support ESG, or if you would like to join IPC’s ESG for Electronics steering group. For more information, send an e-mail to ESG@ipc.org or visit www.ipc.org/esg-electronics.
As this area of corporate responsibility becomes more prevalent and relevant, we at IPC will work with you to ensure that we have an industry-specific approach to ESG guidelines and reporting.
This column originally appeared in the April 2021 issue of PCB007 Magazine.