UNDERSTAND

What ESG reporting means for Finance Teams

UNDERSTAND

Before you jump into developing an ESG strategy, it is important to understand the basics of ESG reporting, how it came to be, and its importance for finance leaders.

ESG reporting is the disclosure of environmental, social, and corporate governance performance. Its importance is to present a company’s ESG initiatives and improve transparency and attractiveness for investors. It also holds sectors accountable for their impact on the planet and its people.

ESG reports include both qualitative and quantitative information on three key areas:

ENVIRONMENTAL

Combatting climate change
Reducing carbon emissions
Responsible procurement and supply chain
Mindful waste management
Preserving biodiversity

SOCIAL

People and workplace culture
Inclusivity initiatives (inc. Gender, BIPOC, LGBTQ+)
Community involvement
Employee engagement
Human rights and labour standards

GOVERNANCE

Internal controls
Policies and procedures
Audit committee structure
Political contributions
Bribery and fraud prevention

WHAT PART DOES FINANCE PLAY?

ESG reporting is all about metrics on ESG priorities and performance for key stakeholders and translating those to support strategy and investment decisions. That’s finance’s bread and butter, right? And with significant experience in regulatory and compliance filings, finance teams should have a pivotal role in a business’ ESG strategy.

With access to data from across the business, finance teams are ideally positioned to collate, analyse, and drive accurate insights. They can also bring ESG into corporate strategy and mobilise sustainability practices within business processes.

And the bonus? Finance teams can drive real business value through ESG, increasing top-line growth, reducing costs, and decreasing investor, regulatory, and legal interventions.

Other skills finance teams can leverage for ESG reporting success include:

Process efficiency
Risk management
Financial management
Investor relationships

ESG reporting needs to go beyond the big-picture vision statements and attractive presentations. Instead, it needs to be about reliable, reportable, and auditable data, presented in a clear and transparent framework. Finance and accountancy teams hold the key to such a toolkit.