Metrics in use for ESG Reporting- 1 Best and complete read

Metrics in use for ESG Reporting

Here is a list of Metrics in use for ESG Reporting that companies can use to start communicating on the ESG issues. The metrics have been divided into four categories:

Each category contains recommended disclosure metrics (both qualitative and quantitative) that have been marked either as minimum disclosures (relevant to all companies) or additional disclosures (that might not be relevant to all companies).

The selection of recommended disclosure metrics has been informed by relevant regulatory initiatives i.e. the CSRD and the ESRS as well as the Warsaw Stock Exchange corporate governance code. Moreover, to address increasing investors’ data needs, they have been also aligned with the mandatory PAI indicators for corporate investments required by the SFDR (see mapping in the Appendix – Relevance of the Guidelines to investors). References have been added below each section to other frameworks and resources that companies may also consider (Appendix – Alignment with EU regulations and other frameworks).

It should be emphasized that the Guidelines do not provide an exhaustive list of indicators and topics. Rather they aim to offer less advanced companies a minimum set of carefully selected disclosure metrics that will help them to prepare for the upcoming requirements stemming from the CSRD and the ESRS and better respond to investors’ ESG data needs. Companies in scope of the CSRD should use the ESRS to prepare their disclosures on material sustainability topics.

Metrics in use for ESG Reporting – General information

General information metrics provide essential context to understand the company business activities and value creation model, it’s material ESG impacts, risks and opportunities, and how it is managing them.

General information

What should be disclosed:

I

M 1

Business model

  • Short description of the company business model and value chain.
  • Whether the company is active in the following sectors: fossil fuel (coal, oil and gas), controversial weapons along with related revenues.

Companies may consider including the following characteristics when describing their business model: economic activities; products and services offered; markets of operation, company size (in terms of workforce, business locations, revenue, etc.)

I

M 2

Sustainability integration

  • Whether and how sustainability matters are integrated in the company strategy and business model.
  • Resilience of the company strategy and business model(s) to material sustainability risks.
  • Policies and actions adopted to manage material sustainability matters.
  • Targets related to management of sustainability matters.

I

M 3

Sustainability governance

  • Governance bodies roles and responsibilities with regard to sustainability matters (e.g. in relation to risk management, target setting, sustainability disclosure).
  • Whether governance bodies are informed about sustainability matters, and how they are addressed by administrative and/or management bodies.
  • Whether incentive schemes are offered to members of governance bodies that are linked to sustainability matters.

I

M 4

Material impacts, Risk and Opportunities

  • The processes used to identify material impacts, risks and opportunities.
  • Sustainability due diligence process.
  • Outcome of the materiality assessment (identified material impacts, risks and opportunities).
  • How material impacts, risks and opportunities interact with the company strategy and business model.

I

M 5

Stakeholder engagement

  • Description of the company main stakeholders, and how the company engages with them.
  • How the interests and views of stakeholders are taken into account by the undertaking’s strategy and business model.

Metrics in use for ESG Reporting- Environmental disclosures

Environmental metrics cover issues that arise from or impact the natural environment.

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Getting started with your Best Sustainability reporting Project

Getting started with your Sustainability reporting

0. Overview Sustainability reporting

Organisations embarking on the sustainability reporting journey would do well to establish a sustainability reporting cycle, setting out what needs to be done, how, when and by whom.

There are four stages to the sustainability reporting cycle and these form the basis for the structure of this project guide:

  • who is accountable and responsible,
  • the processes for identifying material sustainability-related information for reporting purposes,
  • determining, collecting and reporting the data, and
  • considerations for verification that can lead to continual improvement of reporting

When undertaking sustainability reporting, there may well be instances when working on one stage may necessitate considering another stage or parts within a stage. For instance, new information discovered when collecting data for reporting may prompt the organisation to revisit the identification of sustainability-related risks and opportunities (SRROs) that could reasonably be expected to affect the organisation’s prospects or material information about those SRROs. Beyond reporting, the organisation may also revisit its strategy for managing its SRROs.

In support of a simpler engagement, this project guide such that each stage can be engaged with independently of another. Where relevant, links or outlines to key interconnected content from other stages are included. There’s no one-size-fits-all solution. It is therefore important to take time to work through the suggested processes, then design processes appropriate to your organisation and implement them.

It’s also essential to reflect and return to the cycle to build in continual improvement. Those designing and implementing processes for the first time may wish to engage with this guide’s content piecemeal, and all are encouraged to return regularly to its key messages.

1. Allocating Responsibility and Establishing the Landscape for Sustainability reporting

Sustainability reporting is a subset of corporate reporting which, in turn, is essentially about accountability and communication. Whereas the corporate reporting focus has previously been on financial reporting, today’s approach incorporates sustainability reporting, which provides a more holistic view of the organisation.

In addition, before charting a path and making key decisions, it is important, to understand and evaluate where the organisation currently stands in relation to sustainability reporting and the environment in which it is operating.

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