Let’s talk about 📊 ESG Reporting…

❓ What you’ll learn

• What it is and why it matters.

• ESG reporting is complex, but there are solutions.

• The ESG reporting ROI on the table.

• 32 players launching ESG reporting solutions and initiatives.

• Eight real-world case studies demonstrating the effectiveness of ESG data compilation and reporting.

• The link between ESG reporting and your Triple Bottom Line (TBL).

• The information large companies will require from smaller companies.

• Seven predictions into the future of ESG reporting predictions.

• Six recent rounds totaling €160 million.

• Six Frequently Asked Questions and Answers on ESG Reporting.

Let’s dive in 👇

💎 Why it matters

ESG reporting has gained significant popularity by company stakeholders as a transparent way to evaluate a company’s risk in the marketplace, and their actionable commitments to improving the world.

🔍 Problem

Regardless of your organisation's size, collecting, validating, and compiling ESG-related information from various sources is complex. And as always, bad data in means bad data out. 

💡 Solution

ESG professionals, platforms, and reporting tools simplify the process of managing sustainability data and ensure compliance with various ESG reporting standards. They offer a single source of truth to aid decision-making and improve transparency. 

📈 ROI

When done right, ESG reporting will enhance your reputation, attract customers and investors, retain talent, reduce risks (reputational, fines, regulation), and save costs through more efficient use of resources.

🏁 Players:

🚩 Heroes launching solutions

• SustainIQ provides reporting for 200+ ESG performance metrics in one dashboard by Liam and Maria.

• Sweep helps ESG leaders easily take control of their organisations impact on climate and society by Rachel, Yannick and Raphael.

• Anthesis is a science-based activator to manage risk and find value in your sustainable performance, by Stuart.

• FuturePlanet uses AI to inform your ESG strategy and automate your reporting requirements by Donal and Ingrid.

• Daato provides the tools needed to move from compliance to taking actions to improve your sustainability performance by Satya and Thilo.

• Cority gives your employees the power to make a positive difference with actionable ESG data and performance metrics by Mark.

• Prophix centralises your ESG data from various systems to intelligently automate your non-financial reporting and compliance requirements by Alok.

• Osapiens are on a mission to help businesses grow through compliant sustainability reporting and strategy by Alberto, Matthias, and Stefan.

• Sustainalytics provides ESG risk ratings on businesses so that you can reduce your own by Joe.

• Diligent doubles down on enhancing Governance for organisations by Brian.

• Conservice ESG is an ESG reporting tool with the added benefit of providing benchmarking tools and analytics by David.

• Apiday takes the dread out of sustainability management and reporting for sustainability teams by Edouard and Charles.

• Ecomate provides a suite of ESG tools in a self-service style and determines your current resilience to future eco-political scenarios by Alan and Emil.

• Measurabl is an ESG platform built specifically for the real estate industry covering 15 billion square feet of real estate data across 90 countries by Matt and Lance.

🚩 Fighters launching initiatives

• Sisk embeds FuturePlanet into its sustainability ambitions within the construction industry to identify ISO20400 readiness gaps and exceed their original ISO baseline score by more than 25%. <read more>

• Heron Bros wins more business and saves 100+ days using SustainIQ. <read more>

• GUESS transitioned to integrated financial and non-financial reporting globally while executing sustainability strategies and goals with Anthesis. <read more>

• AON created a concrete plan to get to net zero and report on its progress using Watershed. <read more>

• Royal Mail surpassed emission reduction targets, diverted 99% of waste from landfills, and earned a CDP score of A across 1,600 sites using Cority. <read more>

• Oak Hill Advisors slashes the increasing risk climate change poses to investment returns with Persefoni. <read more> 

• EPAM Systems uses Auditboard to ensure it provides the right answers to the right ESG questions across different audit frameworks when producing its annual sustainability report. <read more> 

• Salesforce tracks its goal to achieve net-zero emissions at Salesforce Tower using Measurabl contributing to achieving company-wide net zero 33 years ahead of schedule. <read more> 

🔮 Predictions

1. We’re going to see more regulatory pressure:

   • EU's SFDR and CSRD will continue pushing ESG reporting rules.

   • Green energy and carbon footprint reporting will expand in the USA.

   • G7 supports mandatory climate disclosure, with Asia also requiring ESG disclosure.

2. More Digital Transformation for ESG Reporting:

   • Companies will increase digital tools for better ESG data management and reporting, as current methods are insufficient.

   • ESG reporting standards will become more consistent and comparable.

3. Growing Importance of ESG Data:

   • The ESG data market will grow due to investor, regulator, and consumer demand.

   • Global 2000 Boards will request a formal trust initiative on data security, privacy, and ethics.

4. ESG will be a Core Business Strategy:

   • ESG will be central to corporate strategies, influencing investors, regulators, analysts, customers, and employees.

   • Sustainability will be integral to finance, with CFOs assessing climate change impacts across all company sizes.

   • SMEs below compliance thresholds will voluntarily report non-financial impacts to attract new business.

5. Biodiversity and Nature Conservation:

   • Biodiversity preservation will gain further significant attention, with investment funds focusing on biodiversity and companies committing to reporting principles set by the Taskforce on Nature-Related Disclosures (TNFD).

6. Supply Chain Sustainability:

   • Companies will prioritise ethical sourcing, labor standards, and environmental responsibility due to regulatory requirements.

7. Heightened Scrutiny on Greenwashing:

   • The prevalence of greenwashing will continue to be a concern, with stricter legal definitions and repercussions expected.

💰 Recent Rounds

Apiday raised €20 million in Series A funding in July 2024.

Daato raised €5 million in Seed funding in March 2024.

Watershed raised $100 million in Series C funding in February 2024.

Xcelerate raised $25 million in a funding round in February 2024.

Weefin raised €7 million in Series A funding in November 2023.

VIDA raised €3 million in a funding round in September 2023.

✨ Frequently Asked Questions on ESG Reporting

What is ESG reporting?

ESG reporting involves disclosing an organisation’s Environmental, Social, and Governance (ESG) practices, impacts, and performance. It provides stakeholders with a comprehensive view of the organisation’s operations and its commitment to sustainable development. 

ESG reports typically include information on:

• Environmental: Impact on the planet, including carbon emissions, energy use, waste management, and resource conservation.

• Social: Impact on people and society, covering topics such as employee welfare, diversity and inclusion, community engagement, and human rights.

• Governance: Organisational structure, ethics, transparency, leadership, risk management, and compliance.

What is the Tripple Bottom Line (TBL)?

Triple Bottom Line (TBL) is a framework that expands traditional reporting to include social and environmental performance, in addition to financial performance. It is often summarised as "People, Planet, and Profit," reflecting the three pillars of sustainability:

• People (Social): Focuses on the impact an organization has on all the people involved, including employees, customers, suppliers, and the community.

• Planet (Environmental): Addresses the environmental footprint and impact of the organization’s activities, including resource use, waste, and emissions.

• Profit (Economic): Measures the economic value created by the organization.

TBL encourages businesses to evaluate their performance in a broader context, emphasizing long-term sustainability over short-term gains.

Is ESG reporting mandatory?

The mandatory nature of ESG reporting varies by country and region:

• Europe: The European Union has implemented mandatory ESG reporting for large companies through regulations like the Non-Financial Reporting Directive (NFRD) and the Corporate Sustainability Reporting Directive (CSRD).

• United States: ESG reporting is largely voluntary, though there is increasing pressure from investors and regulatory bodies like the Securities and Exchange Commission (SEC) to enhance disclosure requirements.

• Asia and other regions: Varying degrees of mandatory and voluntary ESG reporting exist, with countries like Japan, China, and Singapore promoting or requiring certain disclosures.

Many companies also engage in ESG reporting voluntarily to meet investor demands, enhance their reputation, and align with global sustainability standards.

The link below provides a draft of the voluntary standards smaller companies can disclose. They also provide a good reference of what Larger companies will expect smaller (suppliers) to provide as part of their own CSRD reporting: https://efrag.sharefile.com/public/share/web-s3684aabe47e24aaa87691f37c92f93c6

How many ESG reporting Frameworks are there?

There are several prominent ESG reporting frameworks that organizations can choose from, including:

1. Global Reporting Initiative (GRI): Provides comprehensive sustainability reporting standards.

2. Sustainability Accounting Standards Board (SASB): Focuses on industry-specific standards to identify financially material sustainability information.

3. Task Force on Climate-related Financial Disclosures (TCFD): Recommends climate-related financial disclosures.

4. Carbon Disclosure Project (CDP): Specialises in environmental reporting, particularly on carbon emissions.

5. Integrated Reporting Framework (IR): Combines financial and non-financial performance in a cohesive manner.

6. UN Sustainable Development Goals (SDGs): Encourages reporting on contributions to the 17 global goals.

Each framework has its own focus and methodology, allowing companies to select the ones that best align with their objectives and stakeholder needs.

How do I report on ESG?

There is no universal template. In general, reporting on ESG involves several key steps:

1. Identify Key ESG Issues: Determine which environmental, social, and governance issues are most relevant to your organisation and stakeholders.

2. Select a Reporting Framework: Choose one or more ESG reporting frameworks that align with your business goals and stakeholder expectations.

3. Collect Data: Gather quantitative and qualitative data related to your ESG performance.

4. Engage Stakeholders: Involve stakeholders in the reporting process to ensure their concerns and expectations are addressed.

5. Develop Policies and Procedures: Implement and document policies and practices that support your ESG objectives.

6. Set Goals and Targets: Establish clear, measurable goals and track your progress against them.

7. Prepare the Report: Compile the data and narratives into a structured report following the chosen framework’s guidelines.

8. Assurance and Verification: Consider third-party assurance to verify the accuracy and reliability of your report.

9. Publish and Communicate: Release the report to stakeholders and communicate the key findings effectively.

How do I write an ESG report?

Again, there is no universal template, but writing an ESG report involves several structured steps:

1. Executive Summary: Provide a brief overview of the report’s key points, including major achievements and future goals.

2. Introduction: Explain the purpose of the report, the reporting period, and the chosen frameworks.

3. Governance Section: Detail your governance structure, ethics, compliance, and risk management practices.

4. Environmental Section: Report on environmental impacts, policies, targets, and performance metrics (e.g., carbon footprint, energy usage).

5. Social Section: Cover social aspects like employee relations, community engagement, diversity, and human rights.

6. Performance Metrics: Include quantitative data and key performance indicators (KPIs) to measure your ESG impact.

7. Case Studies and Highlights: Provide examples of successful initiatives and projects.

8. Future Commitments: Outline your future goals, targets, and planned improvements.

9. Appendices: Include any additional data, methodologies, and detailed information as needed.