Writing an ESG Report
While the process to prepare an ESG report is straight forward, the act of gathering the data to properly inform the report can be a time consuming and complex affair. Planning and managing data gathering requires an in-depth understanding of the various risks that might reside within a company’s operations or supply chain, and the ability to amange and coordinate a wide and varied group of stakeholders. ESG reporting is an activity that should be led from the board. To streamline the preparation of an ESG report, a company will often seek the support of an experienced consultant.
That said, the simple steps needed to prepare an ESG report are as follows:
Define the Scope: Determine the scope of the report, including which ESG issues will be covered, the time period covered, and the geographic locations covered.
Gather Data: Collect data on the selected ESG issues from relevant departments, including operations, finance, sustainability, human resources, supply chain, and corporate governance.
Establish Metrics: Define the metrics and indicators that will be used to measure the company's performance on the selected ESG issues. This may include quantitative data, such as greenhouse gas emissions, deforestation extent, or bycatch from fishing, as well as qualitative data, such as employee satisfaction or community engagement.
Analyze the Data: Analyze the data to assess the company's performance on the selected ESG issues, identify areas for improvement, and establish targets for future performance.
Develop the Report: Prepare the ESG report, including an introduction that sets out the purpose of the report, a description of the company's sustainability strategy, a summary of the data and analysis, and an explanation of the company's performance and targets.
Get Verification: Consider obtaining third-party verification of the report to provide additional assurance of the accuracy and reliability of the information presented. This is essential for industries with a greater impact on people and planet.
Communicate the Report: Publish the report on the company's website, distribute it to stakeholders, and communicate the key findings and recommendations to internal and external audiences.
It's important to note that there are various frameworks available to guide the preparation of an ESG report, such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and Task Force on Climate-related Financial Disclosures (TCFD). These frameworks provide guidance on the selection of ESG issues, metrics, and reporting standards, making it easier for companies to report on ESG issues in a consistent and transparent manner.