ESG Reporting Essentials

Getting into the world of ESG reporting? Here’s a beginner’s guide on what to focus on and what not to overlook!

From Compliance to Competitive Edge: ThePower of ESG Reporting

ESG has become increasingly important recently, due to a rise in global environmental efforts and social awareness. By providing transparency, it boosts investor confidence and shows that your company remains compliant with regulations, while building trust with stakeholders.

Additionally,ESG reporting is not just about mitigating risks, but is also about avoiding potential costly or wasteful processes. By taking on a proactive approach this demonstrates good operational efficacy and helps to make any improvements that may be necessary.

ESG Reporting and Due Diligence

When it comes to ESG reporting, there are so many areas you have to consider and analyze. Not only do you have to report on operations, but you must also do your due diligence on any partnerships or suppliers you work with. This can get very overwhelming at first! So to help, I’ve narrowed down a couple of areas to focus on first.

Company priorities: Gets tarted by looking at what priorities and commitments your company has made, and focus on areas with heightened due diligence requirements and salient human rights risks. A starting point would be conducting an internal materiality assessment to identify principal topics across ESG that need to be addressed.

Environmental: Focus on the environmental impacts caused by your company, including carbon footprint and the amount of waste that is produced. Be transparent and acknowledge any environmental harm that may have been done and implement plans to mitigate any harm in the future, and also acknowledge any positive impacts that there may be too.

Social: Thoroughly investigate workers’ conditions and ensure that their rights and freedoms are protected. Report on the health and safety measures and contingency plans in place for accidents and emergencies.

Supply chains: It is important to do your due diligence of human rights in the supply chain by making sure that suppliers are treating their workers with respect and are providing safe and decent working and living conditions.

Forced labor: Make sure that there are no forced or child labor practices occurring. Investigate recruitment practices and enforce the implementation of policies surrounding the protection of workers.

Governance: Research potential partnerships to ensure that there is no sign of bribery or corruption. Be extremely cautious of potentially being complicit in any terrorism financing or money laundering schemes.

Additional things to observe

External factors can often play a huge role on the industry and hence they must also betaken into consideration when performing your due diligence.

Legal frameworks: Refer to national and international legal frameworks and comply with any directives andguidelines that may be relevant. Make certain that your company is not in violation of any legally- binding directives.

Political climate: Political instability often leads to uncertainty around investing in the ESG industry.Tariffs, trade wars, and armed conflicts all have major impacts on everythingESG related and is are difficult to anticipate or avoid.

Economic state: Investors maybe more inclined to invest in sustainable finance during periods of economic upswing and may be more cautious during periods of economic degrowth. Be certain and do your due diligence before investing.

Useful Tools

Artificial Intelligence: AI tech enables data automation, analysis, and strengthens accuracy. Using AI will reduce manual efforts and will help to streamline ESG reporting processes.

diginexESG: An example of a user-friendly platform that helps to simplify ESG reporting by analyzing data for you and utilizes AI to ensure validity. Enabling multi-variant drafting, it also supports several different reporting frameworks and has the flexibility of customizable reports too!

Assessments: Worker assessments and questionnaires allow for first-hand reports of working conditions in levels lower down on the supply chain. It is important to have a secure way of receiving the reports to ensure worker anonymity and safety is prioritized.

diginexAPPRISE: An example of an affordable platform that provides worker insights by using a standardized question set to ensure working conditions are optimal and to identify any red flags. ‍

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References Guide

We’ve compiled a list of international legal references and guidance to refer to!

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Guidance Area  

International Legal Framework

1. Biodiversity Protection - Convention on Biological Diversity

2. Business & Human Rights - UN Guiding Principles on Business  and Human Rights

3. Child Labor - ILO C182 – Worst Forms of Child  Labor Convention, 1999

4. Climate Change - United Nations Framework Convention  on Climate Change

5. Corporate Environmental Guidelines - Environment and the OECD Guidelines

6. Corruption - UN Convention Against Corruption

7. Data Protection - Privacy Online: OECD Guidance on  Policy and Practices

8. Discrimination - ILO C111 – Discrimination  (Employment and Occupation) Convention, 1958

9. Due Diligence - OECD Due Diligence Guidance for  Responsible Business Conduct

10. Global Reporting Standards - Global Reporting Initiative  Standards

11. Global Warming & Pollution - Paris Agreement

12. Harassment in the Workplace - ILO C190 – Violence and Harassment  Convention, 2019

13. Hazardous Wastes - UN Basel Convention

14. Health & Safety - ILO Guide to International Labor  Standards on Occupational Safety and Health

15. Human Rights - UN Universal Declaration of Human  Rights

16. Human Rights in Conflict Zones - International Legal Protection of  Human Rights in Conflict Zones

17. Human Trafficking - UN Palermo Protocol

18. Mineral Supply Chain - OECD Due Diligence Guidance for  Responsible Supply Chains of Minerals

19. Ozone Layer Protection - UN The Ozone Treaties

20. Responsible Business Conduct - OECD Guide on Responsible Business Conduct

21. Rights at Work - ILO Declaration on Fundamental  Principles and Rights at Work

22. Rights of Migrant Workers - UN International Convention

‍23. Safe Working Conditions - UN International Covenant on Economic, Social and Cultural Rights

24. Sea Law - UN Convention on the Law of the Sea

25. Social Responsibility - ISO 26000: 2010, Guidance on social responsibility

26. Wage Protection - ILO C095 – Protection of Wages Convention, 1949

27. Water Pollution - Convention on the Protection and Use of Transboundary Watercourses

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Taking the Next Step

ESG reporting is no longer an optional process, but an essential one to enhance transparency, risk management, and accountability. By clearly and accurately communicating our company’s environmental, social, and governance commitments and progress, this builds trust with investors and other stakeholders, unlocking various new growth opportunities. Creating regular ESG reports along with actionable goals will show your company’s commitment to sustainable business practices, ensuring long-term impact and value that will be delivered!