ESG sustainability is an emerging discipline, and some of its concepts have been challenging for people to understand. In most cases, the role of overseeing the implementation of ESG sustainability reporting is bestowed on the top management at the board level. For example, the recent guidelines on sustainability by Hong Kong Stock Exchange (HKEX) mandated the boards of listed firms to guide the process, including defining the expected future challenges and how to achieve them.
Other regulations on sustainability reporting are also stringent because they require the adoption and use of reporting frameworks during the entire process and reporting. So, many are those who have a lot of questions, including “what is the best way to implement ESG sustainability reporting?” and “how do you keep the cost low?” Here are the answers that you have been looking for:
1. What is Sustainability? What is ESG Sustainability Reporting?
Sustainability is a concept that embeds the idea of value into a business operation model with the intention of delivering long-term benefits to the brand’s stakeholders. The idea has its roots back in 1992 when the first UN Conference on Environment and Development (UNCED) demonstrated that it was possible to use planetary resources without compromising the ability of the globe to satisfy the needs of future generations.
The idea of ESG sustainability reporting is derived from the basics of sustainability, with the primary goal being to help make the globe better for both present and future generations. ESG reporting is a conscious process that requires companies and organizations to report their impacts on three areas, environmental, social, and governance. The report allows stakeholders to see the efforts that a company is making in promoting sustainability.
2. Why is Sustainability Reporting Important? Who Are We Trying To Satisfy?
This is probably the question that many managers and entrepreneurs want to get answers to more than others. Sustainability reporting is primarily directed at stakeholders of your company. As people become aware about the causes of damage to the planet, society and business, they want as much as possible to avoid any damaging aspect. For example, most investors do not want to be associated with brands that are promoting global warming. Therefore, ESG reports help them to identify the best brands to work with.
We must indicate that in addition to the focus on clients, the reporting is also done by businesses for themselves. This is because it comes with impressive benefits that they do not want to miss. For example, the reporting process starts with a comprehensive business review to identify challenges and opportunities. Then, your company can craft ways of addressing the challenges and optimizing the opportunities. Other benefits of ESG sustainability reporting to your company include:
- Better stakeholder engagement.
- Reduced cost of operations.
- Stronger brand image.
- Satisfied staff and reduced staff turnover.
3. How Do You Correctly Report Your Sustainability Efforts?
How you prepare your ESG report is central in determining its acceptability after it gets released into the market. Therefore, you need to start by understanding the main principles of ESG reporting, including materiality and accuracy. Then, ensure you have the following two items:
- An appropriate reporting framework: You can select frameworks such as the Global Reporting Initiatives (GRI) or Task Force on Climate-Related Financial Disclosures (TCFD).
- Work with appropriate ESG reporting software : The app you select should be developed by experts, integrates with your management system, and further supports automation. For example, the app should make it easy for you to pull out data from the management system, run analysis, and generate reports fast. You can visit Diginex.com for one of the best apps for sustainability management.
Sustainability reporting is the new bar defining organization success and you should not be left behind. Its benefits to both individual brands and the planet have made more governments consider making it mandatory. No matter the size of your company, the truth is that there is so much to benefit from the process.