80,000 acres of tropical rainforest are lost every day, the earth is warming at a rate faster than it was in the 1800s, and massive loss of biological diversity, are some of the headlines we read every day.
These are only a few: hunger, drought, and nuclear armament make one thing certain – the earth is racing towards self-destruction. Well, all is not lost because we can salvage our ONLY planet, and this is where ESG sustainability reporting comes into play.
It is a complex process that starts with materiality assessment and “ends” with the generation of the report for stakeholders to see. However, sustainability is the new way in the corporate world, and we will be very frank here; there is no avoiding it.
For example, leading stock exchanges are now demanding ESG reports before firms can be listed on their platforms. Regulatory authorities, customers, and investors are also not taking any risk. They are also calling for environmental, social, and governance (ESG) reporting compliance.
To navigate the complex process of sustainability management and reporting compliance, you should not make one mistake by setting off alone. There is a risk of getting stuck midway. Instead, you should bring onboard ESG consultants with years of experience to help with the process. As we are going to demonstrate, the experts will not just help with ESG reporting but can also become an important force to help push your firm to the next level.
What is the ESG Reporting Process?
ESG sustainability reporting is the disclosure of a company’s environmental, social, and governance impacts with the goal of making the world a better place for all.
As we have already highlighted, the process of ESG reporting is complex, but let's dig a little deeper to demonstrate what is involved in its management. The process of environmental, social, and governance reporting for your firm depends on a number of components, including the nature of the company, processes involved, and the framework of choice.
For example, you might want to use the Global Reporting Initiative (GRI) or Task Force on Climate-related Financial Disclosures (TCFD), among others in your sustainability reporting effort. The framework will also determine the way the final report you create for stakeholders to read will look like. Here are the main steps involved in ESG reporting:
- A comprehensive review of a company’s operations.
- Materiality assessment to determine the topics that are of greater value to pursue for your business. Companies with high rates of emissions might want to prioritize impacts on the climate. However, another one that deals with medical or education services might want to target social considerations of the neighboring communities.
- Reach your company’s stakeholders, from clients to investors and establish what they prefer for sustainability. You might find that clients want the business to start by addressing product development and climate-related impacts. The target should be doing what stakeholders want because they are the target for the report.
- Drawing a strategy for ESG reporting based on the selected reporting topics.
- Implementation of the selected strategy. This should happen alongside data collection as your business prepares to finally release the report to stakeholders.
- Prepare the report and review progress. It will be a good idea to capture useful highlights to inform the activities of the next reporting season for the company. Ensure the information presented on the reports, be it on social, environmental, development or other aspects, can be verified.
- Release the report for stakeholders, from clients to investors, to read and make their decisions. Also, be ready to provide data for more clarification if stakeholders ask for it.
What Benefits Do ESG Consultants Bring?
As you can see, the process of environmental, social, and governance (ESG) reporting involves dealing with multiple factors, and ultimately, big data. By working with a consulting firm, managing the whole process becomes way easier and straightforward. Check out these benefits and see why you should not miss them in your company (discover our ESG software)..
Helps Your Company to Perceive the Process from the Start to the End
As a manager, it is easy to think about the final ESG sustainability report, but consulting professionals will help to make the process clearer. The consultants will break down the process for you, making it easy to conceptualize what is required in every stage and reduce the risk of using the wrong information. They will demonstrate how to go about materiality assessment and craft an action plan that is sustainable and realistic.
The Expert Will Make It Simpler for You to Pick the Right Framework.
We have already mentioned the top frameworks for ESG reporting, such as TCFD and GRI, but how do you pick the right option? Consulting experts in ESG reporting will help you understand more about the different frameworks and select the perfect choice. Here, the aim is to ensure that the reporting process is clear, the strategy okay, and the final report beyond reproach.
You Are Able to Generate Professional Reports
The bulk of the work in ESG reporting is about strategizing, dealing with stakeholders, and data. If you miss one part, such as comprehensive liaison with investment stakeholders or use incorrect data, there is a risk of getting it wrong.
ESG consultants know the data to gather at the start of the reporting process, defining key performance indicators (KPIs) and generating the right reports. After setting the targeted goals, a good consultant will insist on progressive monitoring to ensure everything is progressing as expected. Well, they come to make the process work, and that is precisely what is delivered.
Consultants Help You Internalize Sustainability Reporting
ESG reporting is driven by the growing desire to address the ills facing the globe today. So, the core of ESG reporting is to ingrain sustainability into your company’s operations, making it the norm.
Good ESG consultants, especially those who have in the past offered similar services to other firms to help them achieve their goals for sustainability, can also assist your companies. For example, you might be advised to adopt green energy, which though expensive in the beginning because of the required investment, helps to cut the cost of production by a huge margin in the long term.
How Do I Pick the Best ESG Consulting Firm?
The benefits we have highlighted for working with ESG consultants are only a few drops in the ocean. For them, no effort is spared to make your firm go to the next level. Therefore, you can expect to be compliant with various regulatory requirements and win the support of stakeholders for sustainable operations.
See: why risk getting into conflict with law and different entities, when you can simply use a consultant for compliance with ESG reporting requirements?
Now, we will tell you the attributes to check for a top firm of consultant:
- Look for a consultancy that has ample experience helping other firms with sustainability-related needs.
- Should be ready to help your company's team to sharpen its skills in sustainability, sustainability reporting, and other related corporate activities.
- It should have professional support so that you can easily get the expected assistance on matters related to sustainability.
- Affordable. A good ESG sustainability firm should not come and make your company empty all its bank accounts. Rather, it should have competitive pricing. Note that it is advisable to look at the pricing after narrowing down to the firm with the best services.
ESG sustainability reporting is the new actor in the corporate world, and it has a huge potential to change the world from the way we know it today. As a manager, you should not be left out as others embrace sustainability in their operations. It will be an important stepping stone to help you move to the next level.
Reach Diginex today for all the assistance that you need on company sustainability and sustainability reporting. When it comes to sustainable operations, you can never go wrong with ESG consultants’ services.