The world of reporting and regulation in the ESG space is an emerging one which is ever-changing and full of specific, and sometimes confusing language. As the environmental impact of businesses is coming under greater scrutiny and regulation, it’s important to have a handle on reporting terminology and requirements.
ESG reporting integrates Environmental, Social, and Governance factors into a company's overall business strategy and reporting practices. It provides a holistic view of an organisation's sustainability efforts, encompassing not only environmental concerns but also social responsibility and governance practices.
ESG and Sustainability reporting are essentially the same thing, as businesses typically use their Sustainability Report to make their ESG disclosures.
Climate reporting is a subset of sustainability reporting that specifically focuses on an organisation's efforts to address and mitigate climate change. It includes data related to greenhouse gas emissions, energy efficiency, and climate-related risks and opportunities.
Environmental reporting extends beyond climate issues to cover a broader range of environmental impacts. This includes reporting on water usage, waste management, biodiversity conservation, and other aspects of an organisation's environmental footprint.
The progression of climate regulation and reporting has been marked by significant milestones. Governments, international organisations, and industry bodies have worked together to establish standards and frameworks that promote transparency and accountability.
Here's a snapshot of key developments:
The UK’s Streamlined Energy and Carbon Reporting (SECR) policy requires organisations of a certain size to share energy use and carbon emissions information in their annual reports.
The Australian government also hopes to introduce mandatory climate reporting in 2024, a move that will hold significant consequences for large businesses and is expected to trickle down to SMEs and supply chains. The Australian government released a consultation paper on 27 June 2023 which proposes:
The choice of the best ESG reporting framework depends on various factors, including a company's industry, size, and specific sustainability goals. There isn't a one-size-fits-all answer, however:
See below for some highly acclaimed Sustainability Reports from both larger and smaller corporations.
Siemens: Siemens is often recognized for its detailed and comprehensive sustainability reports. They provide a thorough overview of their ESG initiatives, including efforts to reduce carbon emissions and promote diversity and inclusion.
Toyota: Toyota is known for its sustainability reporting, emphasising environmental initiatives such as reducing carbon emissions, promoting renewable energy, and advancing sustainable mobility solutions.
Patagonia: Although not a typical SME, Patagonia is known for its strong ESG commitment. They started as a small company and have maintained a focus on sustainability throughout their growth.
Reach out to our team if you are unsure about your reporting requirements or how to cater for a request from one of your customers, investors or part of a tender/ application process