Transparency International UK (TI UK) released ESG Governance and Risk Management: Coordinating Anti-Corruption and Sustainability in Practice (February 2025). The report offers guidance to boards, ethics and compliance, legal and sustainability teams on how to integrate anti-corruption and sustainability efforts.
Human Level’s Take:
- To navigate the evolving sustainability and human rights landscape, companies can leverage their existing anti-corruption processes. Transparency International UK advocates for integrating sustainability and anti-corruption efforts, highlighting how collaboration between legal, ethics, compliance, and sustainability teams can enhance understanding of double materiality, foster a more holistic and forward-looking view of risks and enhance cross-functional collaboration.
- Companies can integrate sustainability and integrity strategies by using existing anti-corruption tools and expertise, for example when conducting supplier due diligence and onboarding, creating a common risk taxonomy and centralised risk register, assessing risk controls, using advanced technologies like AI and existing Know Your Customer technologies, and more. Robust governance and a strong culture of integrity are essential to making these efforts effective.
- TI UK outlines four ESG governance models—centralised, decentralised, network, and hybrid—and emphasizes that no single model fits all. Instead, it highlights nine key principles to promote accountability, integrity, and transparency: regularly reviewing ESG systems, ensuring board oversight, clarifying accountability, coordinating risk management, engaging stakeholders, maintaining transparency, aligning executive targets with sustainability, practicing responsible lobbying, and upholding effective grievance mechanisms.
Some key takeaways:
- The business case for coordinating anti-corruption and sustainability: The sustainability regulatory landscape is evolving quickly, demanding changes to corporate governance frameworks and adoption of sustainability strategies that cover human rights and the environment. Companies can build on their existing expertise, including anti-corruption and integrity strategies, to develop integrated sustainability approaches. The report identifies four reasons why companies should seek to coordinate their anti-corruption and sustainability agendas. First, ethics, compliance and legal teams already have expertise in risk-based controls and fostering integrity, which can be combined with human rights and environmental knowledge to build a sustainability programme meeting laws and international standards. Second, collaboration between sustainability teams and ethics, compliance and legal teams can strengthen knowledge of double materiality. Third, breaking down internal siloes can help ensure more effective and proactive risk management by fostering cross-functional collaboration. Fourth, sustainability legislation presents an opportunity to go beyond ‘tick box’ compliance and embed human rights and environmental considerations across the business. By building an internal culture of integrity in parallel, companies can bolster anti-corruption, strengthen organisational culture and more meaningfully impact the way business gets done.
- Recommendations for ESG governance and risk management: TI UK outlines four general ESG governance models (centralised governance, decentralised governance, network model and hybrid governance) and finds that there is no “ideal” model for companies to take. Instead it indicates nine broader ESG governance and risk management principles that promote accountability, integrity and transparency and act as foundations of good corporate governance: (1) periodically review and adapt the company’s ESG governance system; (2) Board-level oversight with the right skills, knowledge and resource support; (3) establish clear roles and lines of accountability for sustainability priorities; (4) leverage ethics & compliance, legal and sustainability expertise for coordinated risk management; (5) meaningful stakeholder engagement to inform decision-making and risk management; (6) promote transparency and data integrity; (7) align executive performance targets with commitments to integrity and sustainability; (8) engage in responsible and transparent lobbying with board oversight; and (9) ensure effective ‘speak up’ and human rights grievance mechanisms.
- Recommendations for coordinating anti-corruption and sustainability processes: Based on practitioner interviews, TI UK identifies ways that tools and learnings from anti-corruption programmes can inform other ESG risk management approaches, while recognising that some components may differ, like the role of stakeholder engagement. For example, companies can adapt components of anti-bribery and corruption (ABC) programmes to create a governance structure, a controls framework and an enabling environment for sustainability. They can also bring together anti-corruption and sustainability experts to develop a more holistic understanding of risks, for example through a common risk taxonomy and centralised risk register. Companies can ethically use artificial intelligence and machine learning to identify both ABC and ESG risks, and adapt existing anti-corruption technology that identifies supplier and customer risk to capture sustainability risks. In addition, they can integrate due diligence and onboarding of third parties to capture both ABC and ESG risks, creating a more holistic and proactive risk assessment process. Further, fostering an organisational culture centered on integrity can create enabling conditions for anti-corruption compliance, human rights respect and environmental consideration. Companies can also engage legal, ethics and compliance functions to support sustainability reporting and marketing, ensuring that it is “accurate and aligned” with regulation. In addition, ABC investigation processes can serve as a model for ESG investigations, while also accounting for the ways they may be different, for example looking along the full value chain and engaging with stakeholders in sustainability assessments. Finally, companies can leverage functions like internal audit to assess the performance of internal controls for human rights and environment. Integrating feedback from affected stakeholders can support the assessment of both ABC and ESG controls.
