35% Better reputation
24% Increase in company valuation
17% Moral obligation
1. Why are you reporting on ESG? Companies decide to report on ESG for a variety of reasons. Some organizations share ESG metrics because they truly believe in ESG concepts. Doing the right thing is part of their culture and sharing that message is important. Other organizations want to influence stakeholders by showing that their ESG strategy drives value. Still others want to do just enough to satisfy stakeholder expectations and mandatory reporting requirements. How you answer this question will dictate your ESG reporting strategy.
2. Who are your priority stakeholders what ESG information do they want? HR, employees, shareholders, creditors, customers, the board, and more all can be valid stakeholders. But you can’t be all things to all people. Focus on those who matter most with your ESG reporting.
3. What information do you want to disclose? Don’t just report on what’s easiest to calculate. Report on ESG-related information that best aligns with your organization’s values and strategy, as well as with industry touchpoints. And be sure your ESG claims can withstand scrutiny. Public declarations are subject to audit and fact checking by stakeholders – including investors, employees, and regulators.
4. What information do you have? And what do you want to start tracking? Establish a controlled ESG reporting process and clearly define who is responsible for providing the data. This could be different departments, divisions – or even third-party suppliers.
Most Popular ESG Frameworks
33% Global Reporting Initiative (GRI)
32% Sustainable Accounting Standards Board (SASB)
25% Task Force for Climate-related Financial Disclosures (TCFD)
5. What ESG framework(s) do you want to use? No one framework currently offers a truly comprehensive overview of ESG reporting. As a result, many companies choose to partially adopt multiple frameworks to guide their disclosures.
6. How will you manage ESG reporting on an ongoing basis? Standardized policies, procedures, controls and governance are crucial for effectively managing ESG reporting. Establish a clear process, and determine board oversight. And be prepared to evaluate and update as needed.
7. Do you have the technology to efficiently gather the information? Once you decide what information to report, you need to figure out how to accurately and effectively collect, analyze, and report that information. And given the breadth of ESG data – and the market’s desire for investor-grade data – this can be extraordinarily complex. Can your existing tools handle new requirements – or would it be worth investing in an integrated solution to streamline and automate the reporting process?
8. How will you maintain ESG reporting consistency year over year? Using the same methodology year after year adds consistency and credibility to the information you’re reporting. Including prior year information also demonstrates your commitment to the truth, and that you won’t manipulate or mislead by just showing whatever information is currently most positive.
9. Is the information you are reporting comparable to your peers? Providing similar metrics helps stakeholders compare results between companies and make informed decisions. This also can provide additional assurance that you aren’t cherry-picking favorable metrics.
10. How frequently do you want to report on ESG metrics? The most common place to disclose ESG information is in the company’s annual report. Will your stakeholders consider a once-per-year update sufficient – or will they demand more?