ESG Reports: Getting Started
Investors and stakeholders are showing increasing interest in responsible business practices, particularly in the areas of environmental, social, and governance (ESG) initiatives. The U.S. Chamber of Commerce reports that 52% of public companies surveyed publish voluntary corporate sustainability or ESG reports outside of their SEC filings. While this type of reporting is currently voluntary, the SEC is expected to propose mandatory reporting rules this year.
The ESG report shines a light on the strategies and activities a business undertakes to be accountable and responsible. While the annual report may have captured some of these elements in the past, the ESG report focuses on making a positive impact on society.
Implementing an ESG reporting process entails extra work and coordination across business functions. For corporate communicators, the challenge is to hit the right balance of content and to transform data into compelling, human stories.
What is an ESG Report?
An ESG Report (and accompanying website) captures the environmental, social and governance impacts that arise from company business activities. Before embarking on ESG reporting, the strategy, framework, selected metrics and tracking plan must be in place.
What should be included?
Right now there’s flexibility in the scope and content of ESG reporting, but investors and rating agencies typically want to see decision-useful information. It’s tempting to cram the report full of success stories. Remember, longer does not mean better. Content will vary by industry, but may include:
Environmental: Climate change; waste reduction; sustainable supply chain; Green initiatives
Social: Community engagement and philanthropy; diversity, equity and inclusion; corporate values: health and well-being
Governance: Corporate governance; ethical business practices; information security and data privacy; board diversity
Telling the story with impact
Evaluate the ESG issues that are most material to your company and be transparent about performance and opportunities for improvement. Then show how and why your business operates with integrity.