Are you putting off launching your first ESG Report because it seems complex, confusing and complicated?
Well, don’t put it off! An ESG Report can be simple, pragmatic, much easier than you think and still be very effective and useful.
An ESG Report is simply a mechanism to report on your organization’s ESG accomplishments, challenges, plans and strategies. It does not need to be complex to produce immediate value.
A simple, pragmatic ESG Report can open doors to financing, improve stakeholder relations, motivate employees and teams and enhance regulatory relationships.
How To Get Started on Your First ESG Report
Start by simply making a list of your current ESG impact and action areas. What are the major (material) things that your business doing that has an environmental or social impact. And what policies, procedures and practices do you have that relate to your social and environmental impacts.
Set Up a Brainstorming Group
This is easiest to do if you get a small, multi-departmental or cross-sectional group together and simply brainstorm it. Go through the questions below
Don’t be limited by only focusing on externally focused CSR and other interventions. Think about any impacts, positive and negative, that emanate from your business operations.
In your initial brainstorming don’t be too quick to eliminate potential points. Get as much down as possible for each area and then decide which is material.
What Are My Environmental ESG Impacts
What do you know about your business’s environmental impacts?
This is the part that scares off many prospective first-time reporters. Most ‘How-To’ guides to ESG reporting simply refer to carbon footprint, energy consumption, and waste management.
This is fine if you know them, but the reality is that many businesses that aren’t major multi-nationals, don’t know their quantitative impact in these areas, and, to be frank, investing in calculating it may not be the best use of time and resources.
If you have this data great. Report on it.
If you don’t, are there qualitative statements that you can make about your carbon footprint, energy consumption and waste management?
Do you recycle? Do you have an environmental or sustainability policy? Or plans to develop one? What are you doing in the area of environmental management.
How does your business impact on the environment? Are you taking any steps to measure and manage it?
Is your business supporting any internal or external environmental projects and initiatives? If yes, do you have any data? How much you have spent? What was the impact? How many people involved? Etc.
If you go through all this and don’t have anything to report on, your business’s environmental performance is probably something you should start to pay attention to.
Perhaps you want to think about developing a policy? Or starting an initiative in one of the areas above.
Simply committing to developing an environmental policy, or launching an environmental initiative is something your can report on in your first ESG Report – hopefully with the commitment to have more to report on in future reports.
For all of the above, think about what data points you can use, if any. Try to have some quantitative data for as many as possible. (Hint, then, think about how/if you can improve on that data for next year’s report)
If you don’t have anything to report on from above, you have a more serious issue. Environmental performance is increasingly important for businesses of all types, including yours. Not doing anything is a risk and can easily turn into a costly and debilitating risk.
What Are My Social ESG Impacts
What do you know about your business’s impacts on society and communities?
The common set of factors that most guides will show include: your labor practices, your human rights policies, and community involvement.
While these are important, I find that for many businesses their most significant impacts may be overlooked or under-communicated.
This is especially true in emerging economies and extractive sector industries with extensive programs targeting local livelihoods, women’s issues, education and community infrastructure.
Other areas that sometimes get overlooked include the social impact of governance policies such as local employment policies, gender policies, local procurement/content policies, etc.
As with Environmental impacts, start by making a list of your business’s activities and initiatives that have a social impact. See above for thoughts to prompt you.
Feel free to include the social impact caused by relevant policy areas (e.g. your local procurement/content policy, local employment, etc.)
For all these, try to incorporate data. If it is a women’s livelihood project, how many women were affected? How many communities were involved, etc.
If you don’t have data, consider making a commitment to track the data for next year and include that as part of your report on the subject.
What Are My Governance Related ESG Issues
In general this will include relevant policies and processes such as environmental policy, human rights policy, gender policy, procurement policy, employment policy, etc. where they have specific impacts/focus on Environmental and Social issues.
Many larger companies report on things like Board Structure, Executive Compensation, Shareholder Rights, etc. here as well.
While many companies will either not include an SDG (Sustainable Development Goal) Impact Report, or will include it in the Social section, I find it most appropriate to include it in the Governance Section.
The SDGs span both Social and Environmental. Even more, the mere fact that you are doing an SDG Impact Report is in itself a governance issue. Don’t include the full SDG report here – maybe just mention it and refer to where the full report can be accessed. If this is something you do annually it may be worth mentioning how many years you have been doing it
How Do I Organize My First ESG Report.
The above process should have given you some key elements for each of the sections of your report.
Organize them under their respective sections, identify those that are important enough (material enough) to be included and prepare a short narrative about them. Include any data that you have and if you don’t have data, consider making a commitment to developing data and include that commitment.
If you have published more detailed information on any of them, consider making a link to them.
Here is a card that shows how a small business that provides ingredients to the Natural and Organic Skincare and Cosmetics sectored organized its first ESG Report. We helped them organize their information and then it was simply published in a Blog Post and made available to stakeholders.
The printed report is simply a 4 x 6 card with the key points presented on one side and a QR Code linking to that part of the blog on the reverse side. Ironically, its strategy of printing and publishing the report had positive environmental implications
f you would like help to plan or create an ESG report please click here and let us know how we can help you
Watch for a future Blog on how to Communicate and Share your ESG Report Information
ESG, Sustainability & CSR should be as much a business value driver as it is a social and environmental value driver. If it gets out of balance it creates risk and makes the CSR and indeed, even the business itself, potentially less sustainable.
Business is about creating value. CSR is also about creating value; value for society, for
environment and for shareholders.
Thanks for reading
Wayne Dunn
Founder and President