ESG sustainability reporting has become the new norm in the corporate world. Unlike in the past when companies used corporate social responsibility to give back to society, sustainability has created a new way of looking at and addressing the challenges facing the globe.
CSR was a good thing, but it has not delivered maximum results, and the globe has continued to experience major challenges, such as global warming and rapid loss of biodiversity.
Now, more entities, such as the Environmental Protection Agency (EPA), Hong Kong Stock Exchange (HKEX), and International Standards Organization (ISO), are all in agreement that sustainability must be part of every enterprise.
So, if you are a manager or entrepreneur, it is important to also join this noble course. So, here are the most important things that you need to think about.
What is ESG Sustainability Reporting?
Before looking at the core components of ESG sustainability reporting, let’s start with its definition. ESG sustainability reporting is the process of disclosure of a company’s environmental, social and governance impacts from its operations. Although the focus is generating a report for the stakeholders, the process goes far beyond the report to ensure the company internalizes sustainability in its system.
Therefore, consider it as a process of ingraining sustainability in all areas of operations, from production to resources allocation.
To implement ESG sustainability reporting, you need to get a good framework to serve as a guide. This not only makes the process of reporting easy, but will also help with different compliance requirements. Good examples of these frameworks include the Task Force on Climate-Related Financial Disclosures (TCFD) and Global Reporting Initiatives (GRI).
Things that You Need to Know About ESG Reporting
As you consider starting ESG sustainability reporting, it is important to appreciate that concerns have emerged about the poor quality reports by some companies. Therefore, you need to understand the process well and focus on making your company stand out. So, here are some of the things that you need to know about:
- The Process of ESG Reporting
The best way to get it right with ESG sustainability reporting is to ensure you understand the entire process and what is required at every stage. If you do not figure it out, there is a risk of getting stuck midway. If the process looks complex, it might be a good idea to consider bringing on board an ESG consultant to assist.
- Importance of Involving All Stakeholders in ESG Reporting
One of the secrets of ESG sustainability reporting is that it should be created with the target being company stakeholders. Indeed, you should involve them from an early stage of identifying the reporting topics so that what they want is given preference. If you want to attract more clients and keep them close to your company, knowing their preferences can help to build more engagement.
- Materiality in ESG Reporting
One of the biggest questions that managers ask about ESG sustainability reporting is, “what do you focus on?” To determine this, you should do a materiality assessment. This is a process of assessing where your company is having the biggest impact and focusing on remedying them (check our article about Adrian Cheng).
A company that processes cooking oil might put more focus on promoting organic agriculture and cutting down emissions. Another firm that deals with wood products might prioritize supporting forestry projects.
These are only a few of the things that you need to think about. Others include the process of data collection, the staff to be involved, and continuity. To make the process easy and affordable, make sure to work with good sustainability reporting software. Visit Diginex.com for the best programs and professional support.