Everyone, from governments to customers, is demanding environmental, social and governance accountability. Opening a business and sending finished products to the market is not enough to make your enterprise successful.
All stakeholders want to know that you are impacting the environment positively, and this is where ESG sustainability reporting comes into play.
Taking a closer look at ESG, you will realize that it is guided by the main principles, such as comparability to understandability. To get it right on ESG reporting, you need one thing – the right numbers. Keep reading to learn more about ESG reporting and how to do it correctly.
What is ESG Reporting?
ESG sustainability reporting is a set of environmental, social, and corporate governance considerations that affect a company’s effort to implement its strategy and create long-term value. Although the main target for ESG reporting is providing stakeholders with ESG reports, the process goes beyond that.
The process starts with a comprehensive review of the company’s operations that helps companies to comprehend the primary risks and opportunities for success. Other benefits include:
Better connection with stakeholders.
When your stakeholders are comfortable with your ESG report, they will become more attached to your company or brand. This way, you can engrave trust just by “being good”. Look at people who live with wind-generated electricity or solar panels, see how proud they are with those technologies?
Building a good connection with stakeholders is indeed the most important thing to do as a company. You want to appear as the good guy, and good ESG reports can be a great boost to how people see your product’s quality.
Improving the motivation of a company to its staff.
Working in a supporting environment is a necessity for every single staff in a company. However, sometimes your staff may feel uncomfortable with the policy of your company especially when they know that your ESG reports are always off.
If the company is responsible with the ESG reports, staffs will at least work guilt-free and just by being guilt-free can improve their motivation significantly.
Cutting the cost of production.
The most apparent budget cut that a company will get from good ESG reports is the cost for advertisement. The presence of a “good company” will spread like wildfire as words of mouth.
But in addition to that, it can also reduce the cost of production.
Going greener is getting more cost-efficient nowadays, and the number it can affect is huge. According to a research, the number of efficiency can reach up to whooping 60%! Advantages in peer competition is the secret behind this number, and the more efficient the ESG is, the better the number.
A sure way to win more clients and grow a company’s market share.
As mentioned above, using efficient ESG to stand out with peer competition for production process is the huge secret in reducing company’s cost. But what can be boosted is not only the input, the output can also be boosted.
Take for example when the competition is in the market, people would prefer to choose the one with better background. Nobody wants to feel guilty in using a product, and that’s the reason we are using environmentally-friendly products.
It is a great way to build investor confidence in your company.
You are “guilt-free”, you have motivated staffs, you have lower cost in production, and your product stands out in the market. What else can make the investors confident in your company?
Why You Should Get the Right Numbers on ESG Sustainability Reporting
The benefits of sustainability reporting we have listed above are only a few. The list can be longer if you do the reporting process correctly. This means being able to set clear goals and gathering data on time to determine whether the objectives are being achieved. Here are other advantages of getting the numbers right:
They Allow You to Create Credible Reports
Recently, concerns have emerged about the credibility of the reports that companies are releasing. In one of the recent posts on Wall Street Journal, concerns were raised about the data used to create these reports.
If the targeted investors start questioning your data, they will not commit to buying your products or investing their money in it. To increase the accuracy of the data, you should start by setting clear goals with three targets, short-term deliverables, medium-term expectations, and long-term focus.
Makes the Process of Creating ESG Reports Easy
If the process of ESG reporting is incorrect or inadequate, there is a risk of having incomplete data and ultimately, making it hard to generate the right reports. If you are using frameworks such as the SASB model, there is a risk of getting stuck in the middle. Incomplete reports are likely to get you into conflict with authorities, such as stock exchanges or government departments, where ESG reporting is a requirement.
To ensure you generate the best report, start by picking the right sustainability management software. For example, Diginex can help you to know the steps to follow and even automate data collection. This way, data gathering and report generation will be easy and convenient.
You Have the Opportunity to Hinge the Sustainability Agenda for Your Company
The ultimate goal for sustainability is to change the way things are done so that everyone, especially the corporates, can focus on improving the planet in the long term. When you use the right data, it helps to demonstrate the correct state of the company, meaning that you are able to redefine the strategies for growth. So, the right environment management software and data are like a catapult to help your company imagine and march to success.
When you adopt ESG sustainability reporting in your company, think of it as a data-driven process that can only succeed if the process is done right. You need to understand not only the guiding principles and frameworks, but also use appropriate ESG reporting software that can help to gather correct data. With a carefully done ESG report, your business can only grow forward.