We live in an information-driven society that expects transparency from larger and smaller businesses alike. Knowing how to accurately track and report on ESG becomes essential.
Investors, employees, government agencies, and the public demand socially-responsible and environmentally-minded companies. This is measured, analyzed, and achieved through ESG reporting. Before covering how to report, let’s quickly address ESG reporting and its importance.
What is ESG Reporting
ESG reporting reveals the intentions and actuality in relation to three major areas of risk and opportunity:
Environmental: This may refer to manufacturing emissions, a company’s environmental footprint, and long-term impact on the planet.
Social: This may relate to racial or gender equality within a company, the protection of user-related privacy, etc. This leg of ESG reporting is growing more impactful in the digital age.
Governance: This is associated with Independent and Board level governance, executive compensation, and other factors that prevent bad action and align stakeholder interests.
ESG reporting allows for transparency regardless of the complexity of a business or amount of associated networks.
Why Is an ESG Score Important
In many countries, it’s necessary to report ESG scores. In cases when it is not mandated by regulations, a “soft mandate” exists as a strong ESG score may be required by stakeholders to anexpress transparency and attract new consumers, employees, investors, and advocates.
Furthermore, your ESG scores may be calculated by third-parties related to investors,. It’s best practice for your company to be aware of your ESG score in order to “own” conversations related to data or company intentions.
How to Report on ESG
- Identify major stakeholders regarding your ESG impact. This could be employees (who double as investors), the public market, venture capital firms, etc. Identifying those most interested and invested in your ESG score helps define which data points to highlight.
- Connect the dots in understanding how your ESG score is a reflection of actual business practices and how those practices work in supporting the business goals of stakeholders.
- Create an effective and repeatable process of reporting progress to identified stakeholders. The delivery and layout of information should align with industry standards and reflect the preferences and larger interests of individual stakeholders. For example, some like seeing numeric benchmarks while others prefer a contextual storyline.
- Utilize internal teams and members to meet the required format and needs of ESG reporting. Ensure all team managers can identify their roles and how they influence ESG scores. Allow important company executives to buy-in on the ESG reporting process.
- Allow for feedback and agility in having your ESG reporting reflect the real-time needs and data points that stakeholders find most interesting.
- Seek resources and external aid in revising ESG reporting methods and the ability to best articulate the points of interest of all stakeholders.
- Define a framework or convenient dashboard for analysis. Or, find a service that can provide you with a platform to facilitate and streamline reporting.
Use a Platform for ESG Reporting
Most companies don’t have the internal resources to create a framework. It’s the reason many utilize third-party ESG platforms. Leverage ESG software built on a platform with intuitive interfaces and developed by those with industry experience.
Rather than passively hope for compliance and satisfied stakeholders, a platform allows companies to adopt a proactive, dynamic approach to ESG analysis and reporting.
An ESG platform provides the kind of framework needed for deep ESG analysis. Benefit from comprehensive ESG resources, gaining the data along with the help of professionals with experience and wisdom to put the data into action.
Sure, it’s become a welcomed custom for companies to be transparent about production, personnel, and governance. However, ESG reporting is more than a PR tool. ESG data helps companies run more efficiently, earning and saving more money in the process.
Imagine the associated cost of building and maintaining your own ESG data framework. Furthermore, you’ll need internal team members to manage the software. But, those using third-party software escapes the costs of creation and upkeep.
Software data is accessible from multiple devices when you’re in or out of the office. Furthermore, you’re freel of anxieties related to security breaches and system integrity.
Spreadsheets get convoluted, and ESG reporting should go beyond compliance. It should be aligned with manageable data that informs businesses to take action. Access dashboards, price visualizations, market reports, invoices, and more from one platform.