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ESG Reporting Tips and Steps
ESG stands for environmental, social, and governance, and refers to the three central factors in measuring the sustainability and ethical impact of an investment in a company or business. It takes the holistic view that sustainability risk management in a corporate environment extends beyond just environmental issues. ESG reporting is the practice of disclosing information related to these factors in order to manage the material risk factors of the organization. This type of reporting is becoming increasingly important as companies, investors, and regulators recognize the significant risks and opportunities associated with ESG issues.
There are many benefits to ESG reporting, including the ability to identify and manage risks and opportunities related to environmental and social impact, build trust and transparency with investors and stakeholders, and attract sustainable investors. This blog post walks through the first steps to take on establishing successful ESG reporting structures and offers tips to ensure long-term ESG reporting success.
Steps to getting started with ESG reporting:
Establish a Solid ESG Strategy
The easiest way to get started with ESG reporting is to establish an ESG strategy. A good ESG strategy typically follows these general principles and steps:
- Step 1: Conduct a materiality assessment to determine which ESG issues are most important to your company, being sure to outline the KPIs you plan to use. It is typical for companies to collect data under more than one framework.
- Step 2: Gather resources from reporting organizations directly or outsource consultants when determining which reporting framework(s) you will start with.
- Step 3: Stay diligent in sharing your reporting progress and goals. Report continuously, even when unfavorable, to show transparency and trust and avoid greenwashing claims.
- Step 4: Alter business operations and begin to integrate sustainable action across your entire organization. Establish lines of communication and data sharing across teams so that everyone understands the ESG imperative.
- Step 5: Internally audit and gain external assurance on your reports. This will help keep your organization accountable, while also attracting investors.
Be Prepared to be Transparent
The point of a sustainability report, whether it takes the form of a published report or a social media post, is to build trust with your stakeholders. Openness and transparency are key, and so is presenting an authentic, engaging story alongside your data. If you gloss over unfavorable data, fail to reveal important details, or otherwise try to seem perfect, you run the risk of being accused of greenwashing – or equally as bad, being seen as untrustworthy.
Address Any Lingering Issues and Questions
While you want to use storytelling to engage your audience(s), sustainability and ESG reporting must also be evidence-based. Here are some tips to collect comprehensive and complete data and avoid potential miscommunications.
- Openly address any missing data in your report and state the action you will take to fix the issue going forward (remember, transparency is key!).
- Remember that staying quiet on issues of sustainability and ESG can be increasingly damaging to your business. While having some data is necessary, you don’t need to have years of comprehensive data compiled before you can start reporting. Plant your flag in the field and produce a report which is open, honest, and transparent so that your stakeholders can see where you stand on these important issues. This baseline report can then be built on and improved year-on-year as you gather more data.
Tips to ensure long-term ESG reporting success:
Engage Your Stakeholders Throughout The Reporting Process
Your stakeholders are likely the main reason you are participating in sustainability/ESG reporting. Involve them in your reporting process as much as possible to keep them informed and aware. For example, you might:
- Send out surveys asking stakeholders what initiatives they would like to see from you, so you know where to focus your data collection
- Ask your stakeholders if/how the product/service you provide has helped them lead more sustainable lifestyles
- Keep your stakeholders up to date on how your sustainability reporting efforts are progressing
Be Specific With Terminology
It is important to separate the terms ESG and climate change from their associated politicized narratives when operationalizing ESG practice within your firm. ESG is no more than an elevated way of describing risk management and corporate social responsibility for issues proven to be material to business, but has not been historically treated as such (ie. environmental risks and externalities, social justice and equality concerns, and fair leadership practice). Climate change is a science, but firms can start by narrowing the scope of their understanding of this mythically inflated topic by tackling specific topics like energy security or the energy transition, employment and living standards, and resource depletion.
Make Sure All Parties Are Aligned on Sustainability Reporting Tactics
If you are going to be working with a third-party assurance provider, consultants, data analysts, etc., make sure all parties involved are on the same page as to which aspects of the report they will be responsible for completing. Clearly communicate internal deadlines with all parties involved in order to continually progress towards your mutual goals.
All in all, ESG reporting is an important tool for companies to manage their environmental and social impact, build trust and transparency, and attract sustainable investors. By following these tips, companies can level up their ESG reporting tactics and unlock new benefits and opportunities.
How WatchWire Can Assist Your Company With ESG Reporting & Sustainability Reporting
WatchWire is an integrated energy and sustainability management platform that streamlines, automates, and standardizes your sustainability reporting process. WatchWire collects, audits, analyzes, and stores all your energy, water, waste, and emissions data in one place, providing a single source of truth for your organization. With multiple integrations to LEED Arc, GRESB, ENERGY STAR Portfolio Manager, TCFD, and more, standardizing your sustainability reporting process is possible. WatchWire also provides real-time data monitoring, so you can see how well your sustainability measures are working and provide the most recent energy and emissions data to your investors.
To discover more about WatchWire and its capabilities, you can visit our website, blog, or resource library, request a demo, or follow us on LinkedIn, Instagram, or Twitter to keep up-to-date on the latest energy and sustainability insights, news, and resources.
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