Daily decisions made by businesses are closely monitored due to their direct impacts on the environment. While investor, employee, and customer ESG values constantly evolve, companies are advised to open communication channels and create direct channels with their stakeholders in order to receive a constant stream of up-to-date feedback and promptly address any changes.
This engagement might be achieved by distributing surveys, gathering ideas, organising strategy meeting, consultations, community events and many more. Meetings with stakeholders, especially with employees, contribute insight to the effectiveness of ESG strategy. Some employees might be already engaged in sustainability projects and actively seek opportunities to contribute to a good cause.
Stakeholders can play a crucial role in improving the company’s understanding of how its operations impacts others and their environment. Involving all affected parties in the process of identifying non-financial risks and opportunities is beneficial to a business on many levels. From improving the communication channels, increasing the transparency of a company’s operations to building trust in the business.
As companies across the world increasingly embrace non-financial reporting, a number of frameworks and standards have emerged to meet the demand and calls for transparency.
There are many solutions available to build your sustainability reporting on, for example established sustainability reporting frameworks such as the Global Reporting Initiative (GRI), the Carbon Disclosure Project, the Task Force for Climate Related Financial Disclosures, the Sustainability Accounting Standards Board and the International Integrated Reporting Council,, and legal frameworks such as Sustainable Finance Disclosures Regulation (SFDR) and ranking tools such as the Dow Jones Sustainability Index (DJSI).
The GRI however is currently the most widely adopted framework. It is closely related to corporate social responsibility (CSR) reporting.
Whilst all these frameworks, guidelines and ranking tools are popular with larger organisations, enabling them to create a common, shared knowledge base and guiding them in the reporting practice, their complexity is often intimidating and discouraging for small and medium businesses.
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