The ESG Policy Checklist - the company policies you need in place to increase your investor appeal

Policies are formal statements on how a company operates. They don’t reflect aspirations but the truth behind how you function on a day-to-day basis.  They are an extension of, and should reflect, your company values.

For large companies, policies are crucial to ensure everyone works in the same way. For smaller companies, with a tighter culture, they may feel unnecessary, but having these policies in place can be a key differentiator in unlocking investment funding.

At Rawstone, we work with a huge range of equity-backed companies and have seen firsthand the ESG expectations and assessments of many investors. Whilst each investor has their own approach, there are strong commonalities between them which we have analysed and used to develop our own ESG Policy Checklist. Develop policies in all these areas and you will hugely improve your ESG credentials and increase your investment potential.

The ESG Policy Checklist

1. Top priority policies:

·       Anti-bribery and corruption

·       Bullying and harassment

·       Data privacy/information security

·       Equal opportunity and diversity

·       Grievance

·       Health and safety

·       Whistleblowing

2. Secondary priority policies:

·       Anti-competition

·       Equity, diversity and inclusion

·       ESG/sustainability

·       Environment

·       Flexible/hybrid working

·       Human rights

·       Modern slavery

·       Political donations

·       Responsible procurement/supply chain

·       Tax

·       Wellbeing/mental health

3. Policies you may need depending on your industry (not exhaustive):

·       Biodiversity

·       Conflict minerals

·       Drug and alcohol

·       Energy and climate change

·       Lobbying

·       Palm oil

·       Responsible gaming

·       Responsible drinking

·       Responsible marketing

·       Sustainable timber

·       Waste

Note that you may have policies beyond these, particularly in relation to employees (e.g. maternity/paternity policy) and the community (e.g. volunteering leave, charitable giving). We don’t include these here because investors do not commonly ask for them.

It can seem overwhelming to develop policies in all these areas, particularly for a smaller company which doesn’t want or need to be bogged down in paperwork. For growth companies we recommend circumventing this issue by only producing stand-alone policies for the most important areas of your business, and complementing these with a policy document that cross references these and fills in the gaps. We commonly call this a ‘Summary of ESG Policies’ or ‘Code of Conduct’.  

This high-level document is typically only a page or two long and can be readily shared with investors and customers, and ideally, put on your company website. We’ve seen several of our clients shoot up their investor’s portfolio ESG rankings as a result of this one simple document.

You can view our own Code of Conduct here, and whilst we haven’t needed any investor funding, it’s helped us secure contracts through formal procurement processes with several large clients.

If you need any assistance producing your ESG policies, get in touch.

Authored by Caroline Johnstone.