Key Elements for Corporate ESG-reporting
While there are certain frameworks no one-size-fits-all method or framework can produce reporting that meets the needs of all investors for all purposes, but there are emerging international and local best practices, guidelines and frameworks.
Similarly, despite having different needs, there is a growing level of consistency in incorporating material ESG factors into investment decision making. Building on existing resources and practices, this section summarises existing views on corporate reporting of ESG information to investors.
The aim in this section is to identify areas of broad consensus that can provide a clearer message to the corporate community, stock exchanges and regulators, to enable these actors to providing markets with more consistent and comparable ESG information.
What follows below is a discussion of key elements of corporate ESG reporting where our investor working group identified a generally common position on a range of issues.
Key elements – Key Elements for Corporate ESG-reporting
Some companies use the terminology Corporate Social Responsibility (CSR), but in this section the broader terms ‘sustainability’ or ‘ESG’ are useds. Although the term ‘non-financial’ is widely used, it can imply misleadingly that ESG factors are financially immaterial.
The concept of materiality always includes financial materiality, but both companies and investors may have broader interpretations that reflect a values-driven or impact investing orientation.
For this reason, the terminology aligned to the concept of stocks of value (or capitals) is used when talking about reporting, or ‘sustainability factors’.
Purpose of reporting
Reporting should adequately inform the management of the company, its shareholders and its stakeholders. It should help these users to make informed decisions. This includes confirmation of a company’s internal commitments to achieve its ESG goals.