When the Global Reporting Initiative (GRI) started using the term ESG reporting in 2005, it emphasized a process that had already started in 1992 during the UN Conference on Environment and Development (UNCED). Initially, the focus was only to demonstrate that development and the environment can go together without resulting in negative impacts. Now, every new entity, from regulatory authority to governments, is working towards adopting ESG as the baseline for helping the globe address different challenges.
In the UK, the country has indicated it will make climate disclosures mandatory starting from 2023. Indeed, the process has already taken off with other entities, such as Hong Kong Stock Exchange (HKEX) and New York Stock Exchanges (NYSE), already demanding regular ESG reports for listed companies. Already, more than 90% of the S&P 500 firms give their ESG reports annually. However, many are those that are yet to take up this noble path, and they cite a number of reasons, such as lack of expertise and costs.
This post is a closer look at ESG sustainability reporting to help you understand the process and prepare for success.
A Closer Look at ESG Sustainability Reporting
This is the disclosure of a company’s activities in three main areas: environmental, social, and governance. The process targets to transparently provide stakeholders, from investors to regulatory authorities, with information about a company’s efforts on sustainability.
Your stakeholders, who are central to your company’s success, are no longer passive and want to feel part of a process that is addressing the global challenges. They now understand that challenges such as global warming can be addressed by cutting down emissions, while productivity can be enhanced through good governance. With ESG sustainability reporting, you are sure of taking your company to the next level faster and impacting the planet positively.
To correctly prepare your ESG sustainability report, you need to adhere to the main principles, including materiality and balance that ensure you focus on the topics with the greatest impacts. Others include balance, neutrality, clarity, flexibility, and continuity.
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Preparing for Success with ESG Sustainability Reporting
Understanding ESG reporting is the first step in getting it right for your company. Make sure to also use the following strategies for success with ESG sustainability reporting:
- Understand why Your organization is Focusing on Sustainability
Today, ESG sustainability reporting is mainly voluntary, and it is important to understand why it is important for your organization. If you consider it as a matter of compliance only, perhaps to meet the requirement for listing at HKEX, there is a risk of getting it wrong. Instead, the process of sustainability should be internalized to ensure that your organization benefits more.
- Consider Looking at What Peers are Doing
Many times, managers and entrepreneurs look at processes required for compliance and feel like they are being pushed too much. When it comes to ESG sustainability reporting, it is important to take a closer look at what others are doing for motivation. This can give you some insights into where to start and the benefits to anticipate.
- Build ESG Literacy among Your Team
When you start the ESG reporting process, perhaps it is only a few parties who understand it. However, your entire team needs to be educated on ESG reporting for success. So, you might want to include training for your staff on ESG to make everybody involved. If you are working with ESG consultants, make sure to include training for your team as part of the contract.
ESG sustainability reporting comes with awesome benefits, and it is important to start by understanding it. In addition to the strategies we have highlighted in this post, make sure also to allocate ample resources for the process. Furthermore, select the right ESG sustainability reporting software to help you get correct data and prepare accurate reports. Visit Diginex.com now for all your ESG sustainability reporting needs.