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The cheat sheet guide to ESG and sustainability reporting

Tom Keohane

Are you confused by the complexity around ESG and sustainability reporting requirements? Struggling to tell the difference between guidance and frameworks?
There’s a myriad of global guidance, regulation and reporting frameworks, which will apply to different organisations depending on size, industry and specific market or regions. It’s understandable that many leaders feel bewildered.

If you’re seeking to understand which requirements apply to your organisation and how to best meet them, follow our cheat sheet guide to get started.

Infographic: cheat sheet guide to ESG and sustainability reporting

In our view, the right approach to ESG and sustainability reporting involves four key stages. At each stage, all organisations need to answer a fundamental question.

1. Which ESG and sustainability reporting requirements do we follow?

Broadly speaking, when assessing which ESG and sustainability reporting requirements apply to your specific organisation, there are three main categories that you will need to consider.

Global guidance is issued by international bodies to provide counsel and direction, aligning all stakeholders on ESG and sustainability goals.

Prominent examples of global guidance include:

Regulation and legislation are issued at national and/or regional level, which mandates reporting on key ESG and sustainability-related information.

Examples of significant regulation and legislation include:

Trade bodies and associations may require reporting on ESG and sustainability data as part of their membership requirements.

Examples include:

2. Which ESG and sustainability reporting frameworks do we adopt?

A reporting framework provides a set of standards to help you structure and report your ESG and sustainability information. 

At present, there is no universally recognised reporting standard for ESG and sustainability, unlike in other areas such as financial reporting. 

Instead, there are many to consider, with varying degrees of overlap. Some are linked to specific regulation or legislation and are designed to help organisations meet those specific mandates. 

Examples include:

Where trade bodies and associations request ESG and sustainability reporting, they will often provide a bespoke submission template or index.

Organisations will need to assess which reporting framework/s will best help them meet the requirements that apply to them specifically.

3. What ESG and sustainability-related information do we intend to publish and why?

Publicly disclosing your ESG and sustainability-related information involves publishing data points, metrics and claims, and opening them to potential scrutiny.

Some public disclosures will be mandatory, either due to legal regulation or trade body or association membership. Others will be voluntary and should be considered, depending on the benefits or opportunities they could unlock.

Each organisation will have specific circumstances and priorities, which will determine their level of public reporting. Making this assessment should also include examining the ongoing time and resource required to understand reporting requirements, make informed decisions on how to proceed, and meet these commitments reasonably and efficiently.  

4. How will we manage and maintain the right information for ESG and sustainability reports?

Once you’ve determined the right level of public reporting, you will need to ensure the organisation can manage the information required. This will include sourcing, collating and assuring the right information, as well as maintaining your reports over time.

To do this well, you’ll need to look at your processes, your people and the technology you employ. You may find that changes need to be made, and many organisations will need to undergo significant transformation to build an effective ESG and sustainability reporting capability.

How to ensure your ESG and sustainability reporting remains current

This four-stage approach should help you gain greater clarity over your ESG and sustainability reporting. However, it’s important to note that this is not always a straightforward linear process, nor is it a one-and-done exercise. ESG and sustainability reporting is a changing landscape and organisations will need to continue monitoring both regulatory changes and any new benefits that reporting could help unlock.

By regularly revisiting our recommended key questions, you can ensure you keep ahead of new developments, assess what applies to your organisation, and make the right, strategic decisions.