Have you ever seen any business pushing on the environmental or social message just to get more sales?
As businesses are making false ESG (Environmental, social, and governance) claims just to increase their bottom lines, ESG reporting has become even more vital. Recently, the investment management arm of Bank of New York Mellon Carp was fined 1.5 million dollars by the US Securities and Exchange Commission due to its funds’ deceptive claims about social and environmental criteria just to grab stocks.
For businesses around the world, ESG reporting is becoming vital to winning over customers and security investments and staying compliant with governing bodies.
What is ESG reporting?
The ESG report discloses the data of a company’s environmental, social, and corporate governance initiatives. It provides insights into how sustainable and responsible a company is.
Why is ESG reporting important?
In many countries, ESG reporting is voluntary, aimed at helping businesses prove that they care about their customers as well as the community. However, it is quickly evolving with the continuously increasing demand for global regulations.
The new regulations are recently proposed to standardize disclosures that companies make about climate-related risks. Registrants are required to gauge the effects of some climate-related events as well as initiatives in their audited financial statements.
Organizations that care about the future are providing ESG data voluntarily as a part of their annual report. As per the Governance and Accountability Institute, 92% of the S&P companies published sustainability reports in the year 2020. Here are the benefits offered by ESG reporting.
Transparency
ESG reporting allows investors of the company to see the company’s environmental, social, and corporate goals. Furthermore, it shows how the company is dealing with potential issues in these areas. Consistent metric to track the report on your D&I initiative allows investors as well as customers to see that the company is committed to owning a fair and equitable workplace.
Accountability
ESG reporting is also vital for many businesses because it holds board members as well as stakeholders accountable for the steps they take. It has become fashionable for businesses to say that they care about the environment or social causes. But it is not something people just want to hear. So ESG reporting ensures that each and every company is backing up its words with some impactful actions.
Confidence
By opting for ESG reporting services in Dubai, you can give your customers confidence that they are supporting the right business. According to a recent study by Shopify, customers are 4 times more likely to purchase from a business that has strong brand value. Moreover, 77% of customers are concerned about the environmental impact of the products they buy. Consumers and employees are much more interested to work with companies that are strongly committed to sustainability. So the ESG reporting communicates your company’s dedication to such issues.
All in all
ESG reporting encourages businesses to become much more conscious of the environment as well as society. Furthermore, it gives businesses a way to measure their growth. With ESG reporting, you can see where the opportunities for improvements are.