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Environmental, Social, and Governance (ESG) goals have become increasingly important for manufacturing organizations as they strive to align business practices with societal expectations. As leaders weigh variations in standards, frameworks, and discretionary reporting requirements, quality departments can play a key role in helping organizations meet their goals.
Regulatory compliance is the minimum requirement mandated by the government, while ESG represents non-regulatory components where organizations go beyond the baseline. Unlike regulatory requirements, ESG standards are not uniform, says Marcel Minutolo, PhD, professor of Strategic Management, Robert Morris University and Certified Six Sigma Black Belt. Organizations often struggle with choosing the right standard among various options such as Reuters, Bloomberg, or other ESG measuring agencies, but the selected standards must align with what the organization aims to achieve, Minutolo says.