As companies increasingly focus on corporate social responsibility (CSR) and environmental, social, and governance (ESG) issues, it is crucial to recognize the significance of protecting data and individual privacy as key components of socially responsible business practices. Privacy is an issue of continually growing importance for individuals, companies, regulators, and lawmakers. As concerns over security incidents, consumer privacy, and ethical business practices continue to grow, companies are under increasing pressure to not only protect their customers' data as a compliance matter but also to operate responsibly and ethically in their handling of personal information. As such, many corporations are now considering the role that proper data handling practices should play within corporate CSR-ESG programs that aim to promote positive environmental and social impacts while also aligning with ethical governance principles.

Rationale for Incorporating Privacy and Cyber Into ESG Initiatives

While there are obvious ethical reasons for prioritizing privacy and data security, there are also business benefits to doing so and for incorporating related initiatives into a company's overall CSR-ESG program. For example, well-publicized data breaches have eroded trust among the general public regarding companies' willingness to put measures in place to keep customer data safe. As a result, potential new customers, be they consumers or other businesses, will not willingly work with companies that they do not trust to keep their data safe and that are not transparent about their privacy practices. Existing customers will similarly search for better options. Including privacy and cyber practices as a component of a company's CSR-ESG program demonstrates to the public the company's acceptance of its responsibility to keep sensitive data safe. Disclosing these practices as part of a CSR or ESG report increases transparency, which further builds trust, enhances brand reputation, and strengthens customer loyalty.