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Environment, social and governance (ESG) reporting has become a huge focus for most businesses, as investors, employees and other stakeholders increasingly expect companies to report how they impact the world around them.
ESG reporting involves reporting impacts across these three areas, including, for example, the business’s use of water and electricity, its diversity policy and general impact on society. This allows stakeholders to understand an organisation’s value creation beyond its financial performance.
It’s not just a nice-to-have. Benefits of solid reporting in this space can include greater access to investors, the ability to work with top global firms and being attractive to the best and brightest talent.
Critically, credible ESG reporting allows companies to attract better customers, with many global businesses now requiring suppliers to demonstrate how they meet their ESG obligations. But it’s not enough just to take action around environmental and social impacts, and governance. What’s key is being able to collect, verify and share this information.
ESG reporting can be standardised in line with the World Economic Forum’s 21 ESG core metrics across four key areas: governance, planet, people and prosperity. This ESG framework was developed in conjunction with the big four professional services firms – Deloitte, EY, KPMG and PwC – to create a comprehensive system of corporate ESG disclosures.
One tool that companies use to report their performance across these metrics is Socialsuite’s ESG solution. It operationalises this ESG framework into a tangible tool to quickly commence corporate ESG reporting for both private and ASX-listed companies. Businesses that report against the World Economic Forum’s framework set quarterly, achievable ESG plans that they communicate to the market and their stakeholders.
“A company might be rolling out carbon capture software, diversity reporting software, or be starting from doing absolutely nothing,” says Damian Hajda, co-founder and director of Socialsuite. “We’re the glue that brings it all together and helps businesses to report their ESG progress to the market.
“This is important because ESG is keeping directors up at night. They dread not being able to address questions about how the company is approaching its ESG obligations, especially in an environment where activist investors and the broader community are becoming increasingly vocal about these issues.”
Companies using ESG reporting operate across a broad range of sectors, including mining exploration, energy, health sciences, industrials and technology, and are at varying stages of development.
Vulcan Energy, one of the top performers on the ASX over the past 12 months, is one company that adopted ESG reporting early.
Vulcan’s managing director, Francis Wedin, says: “Positive impact is the core reason we started the company and our Zero Carbon Lithium project. We are proud to be a first adopter of the ESG global standard metrics, and we know that by delivering against ESG, we can create long-term sustainable value, while driving positive outcomes for the business, the economy, society and the planet.
“Working with Socialsuite technology and the standard ESG metrics has helped us get started with reporting our position, and understanding how we can continue to build over time.”
Global Energy Ventures (GEV) is a company that is developing a zero-emission shipping solution for the marine transport of hydrogen. “We have already demonstrated that our CNG [compressed natural gas] optimum supply chain for the marine transport of natural gas produces three to four times lower GHG [greenhouse gas] emissions than LNG [liquefied natural gas],” says Martin Carolan, GEV’s managing director and CEO.
“So, in the context of extending our ESG framework across the whole business, it’s important that we embrace the social and governance factors to back up our environmental benefits and drive value in our company.”
Latin Resources (LRS) is an Australian-based mineral exploration company with several mineral resource projects in Latin America and Australia. Executive director, Chris Gale, says: “Latin Resources is very pleased to join the Socialsuite ESG platform and is committed to minimising its environmental impact with various green energy projects in Australia and South America. The company believes ESG paves the way forward for sustainable business and investment.”
These are just three of the many companies that understand that in today’s operating environment it’s no longer appropriate to focus on profits alone. All organisations must consider their impact on the environment and society, and demonstrate sound governance practices.
The message to businesses that have yet to start their ESG journey is to get going as soon as possible, to embed the right culture in the business.
Hajda says: “It’s a lot easier to build a culture of good corporate citizenship when a business is small than wait until it’s large, mature and hard to change. Today, profit and purpose must go hand in hand to ensure you maintain your social licence to operate. The companies that recognise this are the ones that will be the business leaders of the future.”
Learn how your company can accelerate positive change and announce its ESG commitments to the world with Socialsuite’s ESG solution.
Originally published on The Guardian: https://www.theguardian.com/stocks-digital-esg-reporting-comes-of-age/2021/sep/13/meet-the-companies-embracing-esg-reporting-what-is-it-and-how-can-your-business-benefit