A survey from First Insight found that customers, particularly Gen Z, are more willing to support brands with an effective ESG strategy.
First Insight found that 76% of millennials consider the sustainability agenda of an employer before making their career choices. As such, reporting ESG will boost an organization’s chances of attracting new talent.
Ideological shifts in business demand effective ESG reporting
Climate change, biodiversity, customer relations, supply chains, board management practices, data, and security…these all fall under the ESG heading.
Environmental, Social, and Governance (ESG) have become the language of capital markets, expanding market value by maintaining value for future generations.
As such, today we’ve seen a pivotal moment where the growth in ESG investments has seen an all-time high. For instance, according to a recent survey by the CFA Institute, ESG-linked loans to companies in Europe have more than quadrupled – from €27 billion in 2017 to €102 billion in 2019.
On top of this, another report by the Global Investment Sustainable Alliance stated that sustainable investments have risen by 15% from 2018 to 2020 (reaching $35 trillion).
This increase in investor attention comes alongside an ideological shift in business, whereby sustainability and citizenship are no longer seen as philanthropic activities, but rather, they are seen to be key aspects of a successful business. As such, they require effective governance to mitigate external business risk.
With this ideological shift, and as the demand for ESG investments rises, business leaders must sit up, take note, and effectively respond using ESG reporting.
With this in mind, the Green Business Bureau will be creating a series of articles focused on ESG reporting. In this series we will explain:
- What ESG reporting is
- Why ESG reporting is important
- How ESG reporting differs from sustainability reporting
- ESG reporting requirements, standards, and frameworks
- How to get started with ESG reporting (guide)
As the title suggests, this first article details what ESG reporting is, and why ESG reporting is essential for long-term business success.
What is ESG reporting?
ESG reporting is the disclosure of data covering business operations related to the environmental, social, and governance aspects of a business.
By disclosing this information in a report, a company’s progress related to these three fields can be examined against benchmarks and targets. Once more, an ESG report is designed to provide full transparency over an organization’s environmental, social, and governance impact across a multitude of stakeholders, including investors, employees, and customers.