Carbon neutrality plays a vital role in addressing the climate crisis. With countries legally binding net-zero emissions targets, even companies in emissions-intensive industries, such as fossil fuels, are setting ambitious targets. 2021 is projected to be a crucial year as the COP26 summit will take place in Glasgow in November, where parties will be brought together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.
Important innovations in financial reporting and mandatory climate-related financial disclosures are expected to be applied and companies are wondering where they should start. Moreover, by the time the Stakeholder Capitalism Metrics were introduced in September 2020, they feel the pressure stronger than ever.
Take a look on the following important steps that will help your company implement a baseline:
- Get started with ESG reporting
Investors have already been calling for transparency and ESG reporting aligned with Taskforce on Climate-Related Financial Disclosures (TCFD). It is better to stop waiting for regulatory mandates and guidance. The Stakeholder Capitalism Metrics, which include TCFD, could provide guidance for refining the reporting processes.
- Report on ESG-focused metrics
Reporting on ESG-focused metrics has a positive impact on companies by creating innovative solutions, which help them overcome financial risks caused by climate change. Don’t forget that metrics should be comparable, consistent, and backed by science. Also, G7’s Finance Ministers support mandatory climate reporting, accelerating the pace towards a more sustainable future for capital markets.
- Align ESG reporting with your mainstream financial reporting goals
ESG reporting infrastructure should follow the same pattern as the financial reporting to minimize risk and maximize value. The goals set by the companies should deliver meaningful ESG performance information and should be translated into financial results.
- Collaborate for a better ESG Reporting content
The quality of ESG reporting can be improved significantly with a good collaboration of all the departments involved in the process. Everyone has a role to play.
Demands are growing for companies to take sustainability seriously. Do you want to learn more about ESG reporting?
Business professionals in corporate responsibility, sustainability, ESG, communications, marketing, and investors’ relations are already enrolled to the Online Certificate on ESG impact and Sustainable Investing.
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