What is ESG reporting? What is it used for and why is it important?

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The evolution of ESG in companies gave birth to ESG annual reports,  a type of corporate disclosure that details an organization’s environmental, social, and governance (ESG) performance over a one-year period. ESG reporting is becoming increasingly important as investors, consumers, and other stakeholders demand more transparency from companies about their impact.

At Handprint Tech, part of our ideology is providing trust through transparency. This transparency is achieved by regular communication on progress, assessments and benchmarks. Something that most companies fail to do, given that there is a culture of an annual sustainability or ESG report. 

Handprint’s tools enables the transition from annual reports to real-time daily results with the click of a button. We have maximized this opportunity so our clients can now use their data-driven reports for leverage with stakeholders, new investors, and consumers, highlighting not only fiscal goals but also trackable planet-positive achievements. It has never been easier to highlight where you are reducing your ecological footprint and your company’s integration into a regenerative future. 

But, let’s go back for a second. What is ESG reporting and why is it important?

What is ESG Reporting?

ESG stands for environmental, social, and governance reporting, which can take many different forms, but will overall accomplish highlighting what a company is doing today for the future of people and planet

ESG is not an interchangeable term with sustainability, but they do complement each other. When you are discussing your company’s relationship to sustainability, these are specific insights into energy efficiency or perhaps not allowing single-use plastic on-site. However, ESG reporting combines sustainable measures with social equality and governance, plus measuring accountability regardless of position or power.

According to Wolters Kluwer, ESG Reports will “summarize the qualitative and quantitative benefits of a company’s ESG activities, making it easier for investors to screen opportunities that don’t align to their values, and avoid companies with the risk of environmental damage, social missteps or corruption.” 

What Are ESG Reporting Guidelines?

Currently, there is not one agreed-on form of guidelines for ESG Reporting. However, each style will reflect the qualitative and quantitative information of the three ESG categories. This can resemble the following details:

ESG Reporting: Environmental Details

  • What steps are in place to combat climate change?
  • How is a company reducing its carbon emissions?
  • What measures exist to improve air and water quality within the confines of the office plus the surrounding commercial area?
  • How does the company responsibly take part in waste management, with a focus on batteries or single-use employee rations?
  • What is the company’s relationship to their supply chain?

ESG Reporting: Social Details

  • How does a company nurture its team and workplace?
  • What are the gender, BIPOC, and LGBTQ+ inclusivity initiatives taking place or being maintained and updated?
  • How do employees feel engaged with the company’s ethos?
  • What is a company doing to protect its corporate and personal shared data and privacy? 
  • How does a company get involved with their community? Are they a pillar or a leader in activism or change?
  • Does the company adhere to all human rights and labor standards for all locations of work?

ESG Reporting: Governance Details

  • What is the company doing to stay ahead of corruption?
  • What safety procedures are in place for investments, and are they sustainable for the future? 
  • What controls internally are in place for accountability?
  • Does the company have up-to-date policies, principles, and procedures that cover but are not limited to, governing leadership, board composition, executive compensation, audit committee structure, shareholder rights, bribery, lobbying, political contributions, and whistleblower programs? 

What Are ESG Reporting Challenges?

The biggest challenge is the lack of unified agreed guidelines for ESG Reporting. While this creates disparity across different countries and industries, you can also have ESG reporting analyzed by an unbiased third party for an acceptable rating to share. Currently, the companies providing ESG Reporting scoring are:

  • Bloomberg ESG Data Services 
  • Sustainalytics ESG Risk Ratings
  • Dow Jones Sustainability Index Family
  • RepRisk 

Other challenges include the difficulty of measuring indicators, especially with social obligations, and the potential trade-offs between short-term financial performance and long-term sustainability goals.

Join Handprint Upgrade Your ESG Reporting

With Handprint’s technology companies can improve the quality and frequency of annual sustainability or ESG reports. Handprint’s Impact Management dashboard, for example, provides data visualizations in real time, showcasing impact counters, impact accounting, proof of project fulfilment and more. 

Handprint’s subscribers can also access authentic content like photos, videos, community interviews, and stories, directly from the project ground. This feature enables companies turn their ESG reporting into a powerful storytelling tool, engaging stakeholders beyond the compliance boardroom.If you’re a business looking to start regenerating the planet with Handprint, and upgrading your sustainability efforts and ESG reporting, schedule a call with our team here.