As the ESG ecosystem evolves, so do investor expectations for current, informative ESG disclosures. Accordingly, companies must adapt their ESG reporting to align with frameworks and standards to meet investors’ initial investment selection criteria and continuing stewardship expectations.
Among the top five ESG reporting frameworks and standards, investors are most focused on those set forth by SASB and TCFD. The Value Reporting Foundation, the umbrella organization under which SASB sits, noted a 169% increase from Q3 2020 to Q3 2021 in the number of companies that have aligned their reporting with SASB standards.
According to TCFD’s 2021 Summary Report, there has been a 70% increase in the number of organizations (more than 2,600 globally) reporting in line with TCFD recommendations. Numerous industry-led initiatives have also driven support for and implementation of the TCFD, among them Climate Action 100+ (a committee of global investors focused on assessing the performance of the world’s largest greenhouse gas emitters).
Due to this heightened focus on global climate change, investors and regulators are also increasingly mandating inclusion of TCFD’s climate reporting disclosures. For example, BlackRock, StateStreet, and Vanguard expect their portfolio companies to provide disclosures aligned with the TCFD framework. And it is anticipated that the SEC will propose rules related to climate risks that are informed by the TCFD framework as well. On a global level, the G-7, which consists of Canada, France, Germany, Italy, Japan, the UK and the U.S., has called to make climate-reporting mandatory.
Four tips for effective ESG reporting
With such a strong focus on ESG initiatives and disclosures, it’s so important that your reporting provides investors, proxy advisory firms and regulators the information they need. Here are four practices to improve ESG reporting, or get started on the right path.
1. Take the temperature of your internal team
Find out what internal stakeholders think about your ESG strategy and progress, and gain insights that will inform your company’s reporting strategy.
2. Tailor your content to your investors
When it comes to ESG reporting, a lack of understanding in what your investors expect could put the board and company at risk for negative voting action. Georgeson will help you align your reporting content and format to your investors, so they can assess your information easily, lowering the margin for misunderstanding or error.
3. Understand your investors’ most favored frameworks and standards
Knowing what information your investors are consuming will help make communications more effective and save you time. Georgeson leverages proprietary databases built on the investor expertise that comes from managing hundreds of annual meeting solicitations and engagements each year to ensure you know exactly what your top investors want to know.
4. Outsource project management and design
Whether you lack the in-house resources or need to take something off your plate, Georgeson can help manage your report production and design on top of our investor-focused ESG advisory services.
Reporting is vital to telling your ESG story
Georgeson provides the insight companies need to effectively communicate their ESG goals and successes. We identify the standards and frameworks relevant to your company based on an analysis of your specific investors, with a focus on the information most significant to your investors and other key stakeholders, and develop impactful, effective ESG disclosures.
Whether you are new to reporting and trying to establish an initial plan, or need to improve existing disclosures, Georgeson will develop a tailored reporting strategy, keeping your company's most significant investors top of mind. With a variety of format options – website disclosures, integrated, stand-alone, or mandated reports – and uncertainty about what to include or exclude, Georgeson will help you effectively communicate your successes.
No matter what stage in your journey, Georgeson will help you conquer your ESG challenges.
Our advisory services help you understand your own, unique ESG landscape, advance your practices and communicate with investors effectively.