In our final article of the five-part series on ESG reporting we take a look at how can you start to report on ESG.
So far in our ESG series, we’ve covered the what and the why, the environmental factors, the social factors and the governance factors. In this blog, we’re going to look at the how, namely: how can you start to report on ESG?
One of the first things to point out, and one of the first things you may realise if you’ve started to do your own research: there are a lot of standards and frameworks. Unfortunately, there is not one globally accepted framework that every company can use and you’ll find when investigating ESG reporting, you’ll stumble across:
As you can see, this can be a bit of a minefield when knowing what frameworks, or what elements from each framework or code, to implement into your own ESG strategy. If you’re looking to exit, you may find that one potential buyer has an ESG assessment that differs from the next.
Currently, for over 1,300 of the largest companies in the UK, there are mandatory reporting requirements using the TCFD framework. The UK Government also wants to make these TCFD-aligned disclosures mandatory across the economy by 2025, with a significant portion of mandatory requirements in place by 2023.
However, there’s still a lot of overlap between the frameworks which is illustrated through a comparison document comparing the ISSB and TCFD requirements. Therefore, one key point is that the initiatives that fall under ESG are all generally accepted and that whilst the priorities, language and measures may differ, if you focus on tracking, improving and implementing the ESG strategies that we’ve discussed throughout this series, your ESG credentials will improve, regardless of the assessment method used.
Review where you are today:
One of the first places to start would be to look at your business in an ‘as is’ state. That is, completing an audit of your existing ESG practices and performance. There are audit tools that can support you with this, as well as provide recommendations on what you need to implement and improve.
Plan ahead
Once you performed this assessment, you’ll then have a better idea of where you need to improve over the coming months, so the next step will be to create an ESG strategy. There may be some quick wins, like having internal documentation, and there may be some things you won’t be able to achieve overnight, like increasing workforce diversity. It’s important that this isn’t a standalone task, your ESG strategy needs to be incorporated into your overall business strategy to truly get buy-in.
Report and discuss
One key point that we hope came through in this series is that ESG cannot be a once-a-year, box-ticking exercise. Similar to the aforementioned point on incorporating ESG into your strategy, it should also be incorporated into your reporting and a topic in your board meetings and other meeting agendas.
Some areas of ESG will have metrics so you can track your progress, like client satisfaction and employee engagement surveys or diversity %s. Whilst it may not be appropriate to track metrics like this every month, performing an exercise to review this once a year will help.
Reading back through this series:
If you would like to read back through any of this series, please see the previous articles below:
We hope that this series has helped to inform you further about ESG, whether you are just initially investigating this or further down the line. However, if you do have any questions or are seeking support with ESG reporting, please get in touch with our friendly experts on 0845 606 9632 or email hello@recruitmentaccountants.com.
