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FinanceESGJuly 12, 2023

5 practical tips for improving ESG reports

For many companies, executing environmental, sustainable, and governance (ESG) initiatives isn't new — but telling the story of ESG results is. The challenge is not just that ESG reporting is novel, but that ESG reporting is a giant grey area. Regulations aren't yet mandatory. Standards aren't yet universal. Stakeholder priorities aren't entirely aligned.  

ESG reporting is part art, part science, and while there's no such thing as a "good" or "bad" ESG report, there are ways to make ESG reports more impressive.

Five practical tips you can use to improve your ESG reports

#1: Use a framework, but customize where necessary 

I like to think of ESG frameworks as less of a compliance burden and more of a helpful guide for communicating and structuring ESG performance.  

That said, we are seeing more ESG frameworks become set in regulatory stone. Take the Corporate Sustainability Reporting Directive (CSRD), for example, which applies to all large, non-capital market-oriented companies in the EU — or companies already subjected to the Non-Financial Reporting Directive (NFRD). We wrote a whole article about CSRD here.  

CSRD aside, many companies reside in countries that have not yet become subject to ESG regulations, but they are still looking to disclose their ESG performance. There are many recognized frameworks that these companies can consider using based on their ESG goals, including: 

  • Climate Disclosure Standards Board (CDSB) 
  • The Sustainability Accounting Standards Board (SASB) 
  • The Global Reporting Initiative (GRI) 
  • UN Principles for Responsible Investment (PRI) 
  • Carbon Disclosure Project (CDP) 

While choosing a framework aligned with your sector, industry, or E, S, or G priorities is wise, I encourage you to report outside the box too. Have impressive metrics, performance, or projects on the horizon that can showcase ESG commitments but go beyond the limitations of your chosen framework. Add them to the ESG section in your next annual or quarterly report or publish them in a dedicated press release.  

#2: Visualize performance 

A picture isn't worth more than your ESG score, but it certainly makes an impact in communicating ESG performance. Detailed data tables interest regulators, standards bodies, and ESG scoring agencies, but they are often too granular or inaccessible for other stakeholders. Visualizing statistics can help the public, consumers, investors, and suppliers, digest and understand ESG data and make sense of your ESG impact.  

#3: Connect ESG performance with financial results

Investors are increasingly interested in organizations operating sustainably, but that doesn't mean they're abandoning their interest in the bottom line. They want companies that are sustainable, moral, ethical — and profitable.  

Making the connection between ESG performance and financial performance can incentivize investors, financing bodies, and other stakeholders who have (or want to have) interests in your organization. Concretely showing how ESG favorably contributes to the bottom line will only positively impact your organization.   

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#4: Show ESG performance over time 

ESG goal posts should always be moving and evolving, so it's important to show periodic improvement over time. You can do this by comparing and contrasting the success of different ESG initiatives and explaining what made the difference. Most stakeholders want to see progress, not perfection. Incremental progress is as important to highlight as goals achieved. 

#5: Reiterate end goals 

Show how a report's numbers contribute to your end goals and ESG commitments. Don't assume your audience understands the connection between performance and your ESG goals. Spell out how ESG outcomes contribute to your organization's mission, and how that mission is evolving.  

ESG reporting is challenging because of its grey areas. But in the ambiguity, you have the opportunity to tell your ESG story on your own terms. I recommend that today's businesses begin treating ESG as a core value that guides strategy, a KPI that drives project execution, and a reporting imperative that has the potential to inspire growth. 

Learn more about the CCH Tagetik ESG & Sustainability Performance Management forward next arrow icon 

Project Manager - CCH Tagetik

Valentina has more than 6 years of experience in CPM solutions, she has a strong background on financial institutions industries, with a specific focus on Solvency II and IFRS17 implementations.

She is now responsible for the development of the ESG & Sustainability Performance Management for Insurance and corporate industries.

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