You’re already doing it, now report it
ESG issues are not new issues, they're material business issues that you're (for the most part) already managing. What's new is that investors are asking, so now it's a question of explicitly reporting on those issues.
What is ESG reporting? (...and what it’s not)
ESG reporting is not a fad, it's a paradigm shift in business practices that's here to stay. And it's value creating.
What's the big deal about ESG?
ESG reporting is about change, it's a paradigm shift towards sustainable development and investments. This change is happening fast, it's confusing and hard to keep up with. But, it's totally doable, and that's a good thing.
If I'm a company already producing a sustainability report, what would I do?
Companies already producing a sustainability report should pivot to also focus on information geared to investors, i.e. about financially material issues, place it in documents that investors are using, and leverage the SASB Standards and TCFD Recommendations.
How do investors use ESG information?
Investors use ESG information to (1) to select investments, (2) to determine valuations, and (3) to engage with investee companies.
How does ESG create value?
It's a two-step process: the first one is what the company does, the second is what investors do. It involves a company both managing its material ESG issues and reporting on them so that investors have the information they need to translate that into market value determination.
What is ESG and why should I care?
ESG are business issues, and companies should care because investors are asking for more and better information about those issues that are critical to your long-term success in order to make their investment decisions and determine how much your company is worth.
Why report on ESG issues?
Companies should provide investors with ESG reporting because they're asking, in order to make better investment decisions. The benefits are a better reputation, lower risk profile, and higher market value.
What are the risks of inaction?
Companies that don't provide investors with decision-useful ESG information face the risks of a weaker reputation, higher risk profile, and ultimately lower market value.
Why you should report using SASB and TCFD
Both the SASB Standards and TCFD Recommendations were created by and for investors, have garnered significant support from the global investor community, are achievable, and actually quite complementary.
What’s driving investors’ need for ESG information?
There's a fundamental shift in investors' understanding that material ESG issues are very closely connected to companies' performance. So to make better investment decisions, they need more and better ESG information.
What does FinComm do?
Allow me to take one minute to explain how and why I help companies improve their ESG reporting to investors.
Why is everyone talking about ESG, anyway?
The top global systemic risks today are of an environmental, social, or governance nature, and that's driving a trend in sustainable finance, sustainable investment, and sustainable development.
Start from wherever you are
ESG integration into business and reporting practices is a continuous improvement process. Start from wherever you are, with whatever resources are available to you, to provide investors with more and better ESG information, and reap the benefits of doing so.
What does ESG reporting look like?
ESG reporting can look like different things to different companies. What's important is to focus on material issues and report on decision-useful information to investors.
Confused about which ESG reporting standards to use?
Which ESG reporting framework(s) to use will depend on your reporting objectives (investor or multi-stakeholder) and they're not mutually exclusive - it's possible to combine them.
How to deal with ESG research, ratings and rankings, or questionnaires?
The ESG research and ratings landscape is a hot mess and likely to stay that way for some time, the best thing is to own your narrative and provide your own ESG reporting to investors to meet their information need.
If I were a company that has no sustainability reporting, what would I do?
Identify a core set of ESG issues, the information about them and where to put it, and leverage the SASB Standards and TCFD Recommendations.
What are investors looking to get from companies when it comes to ESG?
Investors are looking for companies to speak to their most material business issues, the governance, strategy, management, and performance on these issues, and they're looking for decision-useful information.
Who should own ESG in the company?
Who should own ESG depends, it can be one of many different people within the organization.
What is materiality?
Materiality is about what matters to the company, what will influence its operating and financial performance and ultimately its ability to create value.
What is purpose?
Purpose is what a company does for profit to address societal or environmental problems - best expressed through the SDGs - while at the same time trying to minimize any negative impacts its business might generate.
What’s tone at the top and why is it necessary?
Tone at the top is a necessary condition to getting things done and the kind of information investors are looking for when it comes to properly managing and integrating ESG issues.
Isn’t ESG only for large cap companies?
ESG reporting to investors is value creating for all companies, regardless of their size. ESG issues are material business issues, and reporting on them makes for more efficient markets.
Are ESG integration and climate change the same thing?
ESG integration is more micro and company-specific, while climate change is more macro and global in scope. In both cases, investors are looking for decision-useful information.
Where is ESG reporting heading?
Three trends to look for in ESG reporting: regulations, SDGs, and impact.
Answers to your
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Just want to talk?
If you would like to talk about creating value by improving your ESG reporting to investors, let me know and I will be in touch shortly.
Want to bring the information to your team?
Request a free ESG Briefing, a one-hour, in-person information session about the fundamentals of meeting investors’ growing need for ESG reporting. This briefing is totally free. The number of people in the room is up to you.*
* well, let’s say up to a maximum of 15 people
Want to know if your current CSR reporting is meeting investors’ information needs?
Request a free ESG Disclosure Assessment, to determine the extent to which your company's sustainability/CSR reporting meets investors' growing ESG information needs. This assessment is free and the report is yours to keep.
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