At our recent ESG reporting and assurance webinar, an audience poll revealed that 68% of respondents did not feel that they were sufficiently prepared to deal with ESG in the upcoming reporting cycle, and who can blame them? The ESG reporting landscape is complex, confusing and full of acronyms - whether it’s TCFD being made mandatory in the UK, SECR coming in, or SASB being recommended by the FRC – it’s not an easy area to navigate.
Ultimately, the “alphabet soup” of ESG reporting acronyms and frameworks exists today because different people want different things from ESG reporting and that leads to a lot of confusion for reporters. For those involved in it, the most important thing is to understand who you are reporting to and what they need to know – in other words, what is material? Some topics are material to providers of financial capital like investors or banks – those are the topics that impact your enterprise value. Other topics might be material to broader stakeholders. That’s why understanding the purpose of your reporting is so important.