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ESG Reporting and Communication

ESG reporting is crucial for investors and companies, focusing on environmental, social, and governance factors that impact performance and risk management. It involves identifying relevant themes, engaging stakeholders, aligning with corporate strategies, and evaluating performance indicators to enhance transparency and accountability. Companies can utilize various international standards and frameworks to guide their reporting processes and demonstrate commitment to sustainability.

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8 views22 pages

ESG Reporting and Communication

ESG reporting is crucial for investors and companies, focusing on environmental, social, and governance factors that impact performance and risk management. It involves identifying relevant themes, engaging stakeholders, aligning with corporate strategies, and evaluating performance indicators to enhance transparency and accountability. Companies can utilize various international standards and frameworks to guide their reporting processes and demonstrate commitment to sustainability.

Uploaded by

ma805596
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© © All Rights Reserved
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ESG reporting and communication.

EE6000 Introduction to ESG

Prepared by: Mahmood Hammad


What is ESG Reporting?
• ESG reporting has become essential, not only for investors
seeking performance indicators, but also for companies
trying to increase operational efficiency and decrease
exposure to risks.
• ESG factors cover a wide spectrum of issues that were
traditionally not part of financial analysis yet may have
financial relevance. This might include how corporations
respond to climate change, how good they are with water
management, how effective their health and safety systems
are in preventing accidents, how they manage their supply
chains, how they treat their workers and whether they create
a corporate culture that builds trust and fosters innovation.
What is ESG Reporting?
• ESG Reporting might include how corporations respond to
climate change, how good they are with water management, how
effective their health and safety systems are in preventing
accidents, how they manage their supply chains, how they treat
their workers and whether they create a corporate culture that
builds trust and fosters innovation.

• ESG describes three categories of factors that may affect an


organization’s performance, and therefore, its value. ESG criteria
are best suited to effectively assess an organization’s resilience,
adaptability, long-term sustainability and capacity for growth.
Examples of ESG criteria
Identifying the themes and
defining material issues
• An effective report covers ESG considerations that are
relevant to the business strategy and illustrates the link to
both long-term and short-term value creation. Companies
can also use a variety of national and international
resources to develop an initial list of ESG themes,
whether these themes are generic or sector specific.

• For example, a company can use the UN Global


Compact’s 10 Principles, SDGs, SASB, and the Global
Reporting Initiative (GRI) sector disclosures for
reporting on environmental, labour, human rights and
governance issues.
Identifying and engaging
stakeholders
Understanding the needs of the stakeholders is key in the
definition of the materiality matrix which will serve as
the basis for the ESG report. The term “stakeholders”
encompasses customers, employees, suppliers,
shareholders, affected communities and surrounding
ecosystems, all of which are affected by a company’s
sustainability efforts. Identifying the major stakeholders
allows a company to define its most material issues.
Aligning report • ESG reporting allows companies to gain a better
with corporate understanding of the links between strategic goals,
business models, risks, opportunities, operational
strategy and indicators and financial performance.

Bahrain Vision • Identifying reporting and performance gaps enables the


company to work to fulfil them, thus aligning itself with
2030 corporate strategy and with Bahrain Vision 2030,
subsequently accelerating it.
Referring to
regional and
international sector-
specific standards
Adopting international
sector specific standards
and certifications, such as
ISO standards, allows
companies to gain
accountability and
credibility.
Evaluating relevant
performance indicators
Once material issues have been identified, a company
can disclose specific performance indicators to
demonstrate progress. Such indicators can also be
adopted from leading reporting agencies and initiatives
such as the Global Rating Initiatives (GRI), The
Sustainability Accounting Standards Board (SASB) and
Climate Disclosures Standards Board (CDSB).
Reporting Process
Collecting quantitative data, studying
trends and setting targets

Quantitative data in ESG reporting within a


company serves as a vital tool for
objectively measuring performance across
environmental, social, and governance
criteria, enhancing transparency and
accountability, facilitating comparative
analysis, managing risks, informing investor
decision-making, and bolstering reputation. It provides a concrete framework for assessing
sustainability goals, attracting socially responsible
investors, and improving brand perception through
tangible evidence of responsible business practices.
Annual
reports:
Annual reports are intended to give
shareholders and other stakeholder
group information about the company's
activities and financial performance.
Some companies integrate ESG issues
into their annual reports, aiming to
provide investors with ESG disclosure
at the same time as wider information
about the company.
Stand-alone sustainability
or ESG reports:

Stand-alone sustainability or ESG (Environmental, Social, and


Governance) reports for a company offer concise yet comprehensive
snapshots of its sustainability initiatives, performance, and impact.
These reports typically detail the company's efforts to address
environmental challenges, promote social responsibility, and uphold
governance standards. They often include key quantitative data,
qualitative insights, and narratives to communicate progress towards
sustainability goals, demonstrate transparency, engage stakeholders,
and showcase the company's commitment to long-term sustainable
practices. (ESG Reports are available on Moodle page week 10)
REPORTING ON ESG KEY PERFORMANCE
INDICATORS (KPI)
(According to Bahrain Bourse ESG Reporting Guide)

(Available on Moodle Page


Week 10)
Students Tasks:

Students are asked to read ALBA ESG report to have an


idea about the topics covered within ESG reporting
process.

Students are asked to research and study Global


Reporting Initiative (GRI) standards related to each ESG
reporting KPI stated previously.

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