What is ESG?
Sustainability risks and opportunities. Purpose-led reporting. Corporate social responsibility. While known by many names, ESG covers various risks and opportunities that impact a company’s ability to create long term value. ESG includes social issues like labour practices, governance matters like diversity and inclusion, and environmental considerations like greenhouse gas emissions.
Environmental, Social, and Governance (ESG) has gained increasing attention over the past few years, with many institutional investors investing only in those companies that provide ESG performance reporting. In fact, ESG has considerations relevant to analysts and investors, consumers and employees, and has become a key topic of discussion at the Board table.
Investor and stakeholder groups are calling on companies to become more focused on ESG – through embedding ESG into their core strategy and through transparent reporting. Little motivation should be needed to increase this focus, with growing evidence that companies which are transparent in addressing stakeholder interests, including ESG strategy and performance, may have their market value increase over time.
Mobility Africa Energy is Pioneering ESG Studying and Reporting Consultancy for both Private and Public Sectors in Africa.
What is ESG reporting?
- ESG reporting is the disclosure of material ESG risks and opportunities, both qualitatively and quantitatively, to explain how they inform the company’s strategy and performance.
- The multiple ESG reporting frameworks that exist today create a challenge for investors and other stakeholders as they result in a lack of comparability and consistency in ESG reporting, both locally and globally. This has created a movement towards harmonisation, with the most recent being the World Economic Forum’s (WEF) white paper, which recommends the adoption of 21 core metrics and 34 expanded ESG metrics and disclosures1.
- The adoption of, and consistency in, ESG reporting will continue to gain momentum in Australia with the Australian Stock Exchange’s (ASX) Fourth Edition of Corporate Governance Principles introducing key changes to disclosure of non-financial information.