ESG Sustainability Principles: How Do You Apply Them in ESG Reporting?
ESG sustainability reporting is an emerging area, yet it has become an important factor for success in most businesses. Whether your enterprise is new or has been running for some time, all stakeholders want to know they are dealing with a responsible enterprise. For example, are the products on the shelves produced using ethical processes? Were the employees who made the products happy or forced to work with low pay and a lot of harassment?
As a manager or entrepreneur, it is crucial to rethink the business processes, targeting to win stakeholders. By implementing ESG reporting, you are able to redefine the business narrative and telling the stakeholders that your goals and their aspirations have a common point – success and a better planet for all. Therefore, they should be part of your community. This brings us to the next big question, “How do you implement ESG reporting?” The answer to this question is to understand ESG sustainability reportingprinciples.
ESG Reporting Benefits for Business
Before we can look at the application of ESG sustainability principles, it is important to start by appreciating the benefits to anticipate. Here are some of them:
- Enhanced understanding of the risks and opportunities for your business.
- Better link between financial and non-financial performance of the company.
- Helps businesses to cut costs and improve efficiency.
- An excellent way to reduce the risk of social, environmental and governance failures.
- Helps to improve the reputation and brand loyalty of an enterprise.
- A good way to help external stakeholders understand the company’s value.
These are only a few of the benefits that you should anticipate for adopting ESG reporting. Managers are particularly satisfied from realizing that the efforts will benefit not just their firms but also the entire community and the planet.
Principles of ESG Reporting and their Application
These principles were designed to help guide ESG reporting to build credibility and reliability. When the report is finally released to stakeholders, the principles will make them easily see what you have done and say this is awesome. So, here are the principles:
- Transparency and Accountability.
This is the main principle, and it is aimed at ensuring companies only give the correct information when preparing the ESG reports. It is true that you might be targeting to cut waste production by 50%, but what is the current rate of success? If you installed new machinery but it is not performing as expected, the efforts need to be captured. Then, detail the possible challenges.
Stakeholders appreciate transparency because they know committed firms will always come up with remedies for correcting the challenges. If you achieved so much, provide evidence for the reported numbers. You should also be ready to answer questions about the efforts and how your firm will build on them to achieve more.
- Consistency in ESG Reporting.
When preparing for ESG sustainability reporting, stakeholders are interested in seeing the consistency of the policies used to implement it. This implies that you need to think long-term when drawing goals for sustainability. For example, if you prefer to promote social justice, consistency can be demonstrated through activities such as supporting education reforms in targeted regions, working with local administrations in developing the right policies, and empowering communities.
- Building on Existing Reporting Frameworks.
If you already have a framework that is supporting sustainable activities, stakeholders will appreciate it so much. It implies that you were already ahead in promoting conservation, healthy societies, and responsible corporate activities. When you capture this information and ensure it is reliable, your firm will earn the trust of stakeholders. To make the efforts and ESG reporting more effective, consider adopting an appropriate sustainability reporting software.
These ESG reporting principles can make your efforts realistic and enjoyable. You might also want to break the targeted goals into phases to realize them easily. Furthermore, try to be as creative as possible to identify more activities that positively impact the planet.
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