While GRC and ESG (Environmental, Social and Governance) complement each other and share some common ground – especially around governance – they have different focus areas.
GRC focuses on protecting the organization and ensuring it operates within the boundaries of acceptability and the law.
ESG has a different angle. Alongside governance, ESG also addresses environmental and social responsibility, which can range from an organization’s carbon footprint and waste management to the wellbeing of employees, diversity initiatives and community engagement.
While ESG doesn’t focus on risk and compliance in the GRC sense, these elements are still relevant within the areas it focuses on. For example, environmental and social responsibilities can pose risk factors if not managed properly. There are also often elements of compliance in meeting environmental and social regulations.