Leveraging Privacy as a key part of your ESG strategy
By Mark Carver, Principal Consultant — Privacy, Mosaic FSI
Environmental, Social and Governance (ESG) standards have become a crucial part of an organisation’s performance, reputation and risk mitigation strategy. Organisations that do not adopt ESG policies stand to lose out. Why? ESG performance has become a competitive differentiator for stakeholders, from investors and employees to suppliers and consumers.
Increasingly, organisations are including privacy metrics into their ESG reporting framework. Incorporating good privacy by design practices can enhance an organisation’s traditional regulatory compliance approach allowing them to better respond to the ever changing legislation landscape, can differentiate them from competition and importantly increase stakeholder transparency and trust. Equally, Privacy Enhancing Technologies (PETs) are becoming a key component of an organisation’s privacy strategy, in turn helping organisations meet their ESG goals.
What are PETs?
PETs allow businesses to leverage the increasing amount of information they hold while ensuring personal or sensitive information stays private throughout its lifecycle. Some PETs provide tools for anonymisation or data masking, while others enable collaborative analysis on privately-held datasets, allowing data to be used without disclosing copies of data. Others help generate synthetic data for test purposes or to evaluate AI or machine learning models.
How can Privacy by Design techniques enhance my ESG goals?
Examples of how using privacy by design techniques and PETs can help organisations improve their ESG goals include:
Protecting personal information: Using anonymisation or data masking tools can help ensure that personal information is not misused in any way, thereby reducing the risk of privacy breaches.
Promoting trust: By protecting personal information and demonstrating a commitment to privacy, organisations can build trust with customers and stakeholders, enhancing their reputation and social responsibility.
Improving compliance: PETs can help organisations meet the ever changing privacy regulatory requirements by reducing the need to constantly rework or update your privacy policies or operational practices, thereby improving their governance and reducing the risk of fines and legal action.
Adopting data minimisation strategies: PETs can help organisations reduce the amount of data organisations need to collect and aids good practice. A lesser obvious benefit is that data minimisation techniques can also reduce energy consumption and minimise an organisations carbon footprint. The less data you need to collect and hold, the less processing and storage you need, reducing power requirements. This of course reduces the environmental impact associated with data centre hosting as well as impacting an organisation’s social and governance goals.
Ways to embed Privacy in to my ESG framework
Ensure you incorporate privacy by design practices into your processes and products to minimise the collection and processing of personal information and to maximise privacy protection. Adopting a privacy first approach not only ensures regulatory compliance, it also assures stakeholders information is handled ethically, strengthening governance. In In addition it allows companies to promote greener ways to collect, process and store information, reducing their carbon footprint.
It is important to evaluate different privacy enhancing technologies, such as encryption, anonymisation, and data minimisation, to determine which ones best align with your ESG goals.
Be transparent: Ensure products and services are designed in a privacy-friendly manner and individuals understand what their personal information will be used for. For example, be transparent with people when using the likes of Biometrics or algorithmic (AI) decision making and avoid the use of dark patterns. This builds trust with individuals enhancing your social standing with them and can positively differentiate you from others.
Educate employees and stakeholders about the importance of privacy, and how the privacy enhancing technologies contribute to your ESG strategy.
Regularly monitor and evaluate the effectiveness of the privacy aspects of your ESG framework, making improvements as needed to ensure continued alignment with your ESG goals. A well aligned privacy and ESG strategy can provide organisations with a competitive edge which results in brand equity that is grounded in trust and that improves bottom-line results.
The case for making information privacy an integral part of an ESG programme is strong: companies, consumers, investors and employees see the merits, be it financial, reputational or ethical.
Using PETs can help companies to meet privacy regulations, manage privacy risks, and build trust with stakeholders, contributing to their ESG goals. Doing so will also help to transition an organisation’s traditional regulatory compliance approach to privacy to one that places privacy at the forefront of an organisation’s overall risk strategy, with the potential to deliver improved sustainability and long-term stakeholder trust.
How can Mosaic help?
We have only touched on how good privacy by design practices and the use of privacy enhancing technologies can assist organisations achieve their ESG goals.
Mosaic’s Privacy and ESG consultants can assist you to develop and implement you ESG strategy encompassing privacy as a key, embedded part of the framework. Please contact us at info@mosaicfsi.com for more information on how we can help.