The realm of Environmental, Social, and Governance (ESG) reporting is continually evolving, reflecting our society’s growing understanding of sustainability's critical role in business. Amidst this evolution, a new ESG framework has recently emerged: the ESG Integrated Disclosure Project (ESG IDP). As a company committed to staying at the forefront of sustainability and ESG reporting, Diginex is proud to announce the integration of the ESG IDP into our software.
What is the ESG IDP?
Launched in late 2022 by a consortium of leading alternative asset managers and industry bodies, the ESG IDP offers a framework designed to standardize ESG-related disclosures. Its primary objective is to enhance transparency and consistency for both private companies and credit investors, fostering a more sustainable business landscape.
ESG IDP exhibits a high degree of harmonization with the Sustainability Accounting Standards Board (SASB) standards. Both frameworks aim to identify and report on sustainability issues that can materially impact a company's financial condition and operating performance. With the integration of the ESG IDP, Diginex now offers clients access to a total of 13 frameworks, including other popular framework options such as GRI, SASB, and TCFD.
Within its assortment of 2500 metrics, there is a universal set of ESG metrics applicable to all users of the framework, as well as 77 metric sets based on SASB industry categorization. By integrating the ESG IDP and their 2500 metrics into our software, Diginex equips clients with a robust framework for quantifying and articulating their sustainability performance across diverse sectors, making it applicable to organizations of all sizes and industries.
Who is the ESG IDP best suited for?
The ESG IDP is designed to be a valuable tool for a wide variety of organizations, but certain groups may find it particularly beneficial.
Borrower Companies: The ESG IDP framework is primarily designed to be completed by borrower companies and shared with their lenders. This includes private companies in various sectors who are looking to attract investors or secure credit. The framework offers these companies a baseline from which to develop their ESG reporting capacity, helping them to communicate their sustainability efforts effectively and transparently.
Lenders and Credit Investors: On the investor side, lenders and credit investors stand to benefit significantly from the standardization and transparency offered by the ESG IDP. The framework enhances their ability to identify industry-specific ESG risks in their credit portfolios, allowing for more informed decision-making. This can be particularly valuable for alternative asset managers, including private equity firms and venture capitalists.
Small and Medium-Sized Enterprises (SMEs) and Mid-Market Businesses: These businesses often require a more proportionate approach to ESG disclosure than large public corporates. The ESG IDP, by simplifying and harmonizing existing market practices, can reduce the burden on these organizations while improving the materiality and comparability of ESG disclosure for investors.
Organizations Seeking to Align with SASB Standards: Given the high degree of synergy between the ESG IDP and the SASB standards, organizations that are already using or considering SASB for their ESG reporting may find the ESG IDP an effective complement or alternative.
Ultimately, the ESG IDP can be a powerful tool for any organization that is committed to transparent, accountable, and effective ESG reporting.
Advancing Sustainability Reporting with Diginex and the ESG IDP
The introduction of the ESG IDP into Diginex's software signifies our dedication to providing clients with cutting-edge tools and resources for ESG reporting. By offering a wide variety of the most popular ESG frameworks, we empower companies to communicate their sustainability efforts more effectively, fostering an environment of transparency, accountability, and enhanced sustainability practices.
At Diginex, we are passionate about driving forward the momentum of sustainable business practices. With the integration of the ESG IDP, we continue to pave the way for a more sustainable future in the business world.
About the Author:
Markus is a specialist in ESG & Sustainability Reporting and at Diginex, uses his passion for sustainability reporting help create the next generation of sustainability reporting software solutions. With sustainability experience gained in academia, industry, and consulting, he has utilized countless sustainability frameworks, standards, and ratings to improve sustainability strategies for companies in a wide variety of industries. Learn more about Markus here.