From Singapore to the UK and Brazil to Germany, the one most notable thing about business today is the growing demand for ESG sustainability reporting. Stakeholders only want to be associated with companies that are responsible. Investors are now hesitant to inject capital into companies that are thought or proved to use malpractices, such as the emission of toxic gasses into the environment, in their operations. Similarly, customers want to know that the brand they are associating with uses clean production strategies. As an investor or manager, you cannot take your eyes off the sustainability button.
If you are getting started in the sustainability reporting journey, there are a number of things to factor in. One of the most important is the sustainability reporting framework to use in the process. Which one should you use for your company?
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What is ESG Sustainability Reporting?
Recent studies have found that more people are willing to invest in sustainable brands. In 2017, Morgan Stanley did a study that established that over 86% of millennials are willing to work with companies focused on making positive impacts on the environment. So, your efforts on sustainability should be guided by ESG reporting frameworks.
ESG sustainability reporting is the process of disclosing a company’s impacts in three main areas, environmental, social, and governance. The report starts with a review of the company’s operations to establish the areas of focus and craft the preferred goals for sustainability. Then, a strategy is crafted to help achieve the preset objectives. These efforts, plus the results you get, are ultimately captured in the final ESG report for stakeholders.
To craft a good report, you must be guided by the core principles, which come in handy to promote transparency and reduce the risk of greenwashing. Here are the main principles:
We must indicate that the core of ESG sustainability reporting is not simply to present a report to stakeholders. In addition, it targets to help companies change their focus, progressively transforming into sustainable enterprises. So, are you ready?
A Deeper Look at the Main ESG Reporting Frameworks
To correctly report your company’s environmental, social, and governance impacts, you need to use one of the following frameworks.
Streamlined Energy and Carbon Reporting (SECR)
This framework was developed by the UK government to help companies report their energy and carbon emissions on a yearly basis. The primary objective of the framework is to ensure that all companies follow the same carbon reporting system for higher transparency.
Carbon Disclosure Project (CDP)
CDP is a global organization that targets developing standards for companies to disclose information on water use, forestry, and greenhouse gas emissions. The main advantage of this framework is that it can be applied by a wide range of organizations, from manufacturers to real estate developers.
Global Reporting Initiative (GRI)
GRI was the pioneer in the field of ESG reporting, and other latter frameworks have borrowed from its design. The most notable thing about GRI is that it does not just help companies to report their ESG impacts but also in managing them to achieve the targeted goals. Also, it can be used in a wide range of industries and integrates well with most business management systems.
These are the main frameworks that you can use for your ESG sustainability reporting. Remember that in addition to the framework you select, it is paramount to have appropriate sustainability reporting software. A good app not only allows you to collect the right data but can also automate the process and run multiple analyses required for accurate reports. Reach out to Diginex.com to see their advanced sustainability reporting programs and get the best support from professionals.