Sustainability reporting (non-financial reporting) is a disclosure of company’s environmental, social, and governance objectives, risks and opportunities - all these non-financial aspects of operations which are traditionally not included in financial statements- and the company’s progress towards them.
Non-financial performance indicators and sustainability topics are increasingly relevant and integrated into investors' decision-making processes, as evaluations based purely on financial information alone is no longer sufficient. Sustainability reporting provides a much wider picture for the stakeholders to evaluate performance of a business, presenting the organization’s values, governance model and long-term strategy.
ESG metrics are being widely adopted as indicators of corporate leadership and governance for capital markets. Companies with strong performance in this area are perceived by increasingly climate focused investors as lower risk and more resilient during a crisis.
Environmental, Social and Governance performance and its disclosure is becoming a focal point for investors. Companies can only anticipate more ESG scrutiny and regulations in the future.
ESG Reporting is a way of a company assessing its non-financial performance and overall impact, focusing on the three most important aspects:
Direct and indirect CO2 emissions, renewable energy management, water usage, waste management and recycling, circular economy, recyclable packaging, sustainable transport and environmental product design.
Impact of the company: it can be measured through its salaries and wages, jobs created, employee diversity, pay gaps and compensations packages, employee support and training, marketing practices, handling of customers relations and complaints, data security and product quality.
Governance of the business : it includes information on how the company is run and managed, if the ESG is a part of company’s long and short term policies and business strategy, the independence and diversity of the board of directors and its ethics & values.
Social and ethical aspects of a company’s performance are nowadays subject to scrutiny, not only by their socially responsible investors, but all stakeholders: customers, employees, business and trading partners, the media, civil society, regulatory bodies, international organisations and national and international legislators, with increasing pressure for transparency.
Businesses of all sizes are already included in the ESG value chain - even if they are not under obligation to directly report yet, they form part of operations of companies they work with and contribute to their impacts.
Green company is an enterprise that aims to have a minimal negative impact on the global or local environment, community, society, or economy. Smart businesses stay ahead of the curve by anticipating the constantly evolving requirements and stakeholder expectations.
Sustainability focused companies communicate their performance and impacts regularly, addressing a wide range of sustainability issues measured by applying environmental, social and governance parameters. Often, sustainable businesses have progressive policies, focused on environmental and human rights, setting trends and impacting their surroundings positively.
There are proven benefits for a business in taking proactive measures and focusing on sustainability and climate action.
Stakeholders want transparency reporting on a company’s environmental, social and governmental (ESG) impacts addresses stakeholders’ calls for a greater transparency in the businesses they invest in or support.
Build a solid reputation
Gain more trust and appeal to investors and capital. Being open about your sustainability practices and disclosing the data allows stakeholders and investors to gain insight into your business and see how you address their social and environmental concerns.
Help them help you
Embedding sustainability into your business connects you to a network of stakeholders and investors eager to contribute to your best practises, maximise your positive impacts and add value.
A well-managed sustainable company stays ahead of regulatory requirements, addresses and mitigates ESG related risks increasing their competitive advantage
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