Sustainability is becoming a more significant concern for everybody. In the past, it was primarily a focus of hipsters and full-time environmental activists. However, in recent years it has become much more mainstream. Even professional investors and money managers are trying to do their part to help the planet.
One of the ways that the financial sector is trying to help with sustainability is by focusing on environmental, social, and governance (ESG) investing. ESG investing focuses on creating portfolios that use assets from companies that prioritize helping the environment and furthering other social goals. One recent poll by Harvard shows that 26% of global investors focus heavily on ESG investing strategies.
Although ESG investing and management have many benefits, it is not without challenges. One of the biggest challenges in recent years has been cybersecurity.
The harsh reality is that cyberattacks are becoming more prevalent with each passing day. Many people hoped that cyberattacks would peak during the pandemic end is up after people started spending less time online. Unfortunately, they have only gotten worse. The number of cyberattacks increased by 15.1% between 2020 and 2021. Unfortunately, ESG companies are not immune to cyberattacks. Therefore, they must invest in good malware protection and VPN providers to prevent these risks.
Cybersecurity Must Be an Essential Pillar of Modern ESG
No business is exempt from the risk of cyberattacks. Unfortunately, many hackers have taken to targeting eco-friendly companies. They are impartial to the consequences as long as they make money or further their other objectives.
This means that cybersecurity must be a top priority of any ESG organization. In fact, the World Economic Forum recently highlighted the importance of making cybersecurity a priority for any environmental or socially conscious organization.
“Companies need to start looking at cybersecurity as part of ESG. Cyber risk is the most immediate and financially material sustainability risk that organizations face today. Those that fail to implement good governance on cybersecurity, using appropriate tools and metrics, will be less resilient and less sustainable. This, in turn, has an impact on the other organizations they rely on, and ultimately on the stability of companies, communities, and governments,” writes Anna Sarnek in the article that she wrote for the World Economic Forum.
Here are a few reasons that cybersecurity must be a top priority for ESG companies:
- Anna points out that cyberattacks have devastating consequences for society as a whole. When companies are shut down due to cyberattacks, they are unable to continue to offer value to the communities that they serve. Companies with strong social missions will no longer be able to better society.
- Anna didn’t actually talk about the impact that cybersecurity concerns have for the environment. However, it can be quite considerable. Digital resources have a substantial effect on our carbon footprint. The Internet is estimated to account for around 2% of the global carbon footprint. Hardware also affects the environment, because it depends on scarce resources and requires the production of harmful environmental toxins to be produced. When companies are targeted by cyberattacks, their hardware can be significantly damaged. This can cause companies to increase their environmental footprint when they have to replace it.
- Cyberattacks also have serious consequences for the value of companies. They have to absorb a lot of the cost when insurance companies can’t cover their losses after a security breach. This makes ESG companies with poor cybersecurity less attractive investments, which might deter investors from allocating their funds in ESG portfolios in the first place.
There are clearly a number of compelling reasons that ESG companies need to make cybersecurity and essential part of their business. Keep reading to learn some of the ways that they can do this.
Using up-to-date malware protection services
Anti-malware software is the first line of defense against most cyberattacks. Hackers routinely use certain types of malware to exploit their targets. They might come in the form of keylogger applications that help them steal passwords or other malicious applications that we can the defense of the digital security system. You need to make sure that your virus protection software is up-to-date.
Educate employees about phishing scams
Phishing is a tactic that cyber criminals use to get information from their targets. They might pretend to be a regulator, a senior member of the company, A customer seeking help or anybody else that seems innocent. They will try to discover information that will help them exploit their targets more easily. ESG companies will be better protected if they educate their employees about the different types of phishing tactics hackers use