ESG reporting, on the other hand, goes above and beyond a company’s usual Financial and even Sustainability Reporting, and should reflect its overall business objectives and align with its vision, mission and values. It refers to the three central pillars in measuring the Sustainability and Social impact of an investment in a company. These are the Environmental, Social, and Corporate Governance (ESG) metrics. These criteria help to better determine the future financial performance of companies (Return and Risk). This kind of Reporting covers social issues like a company’s labor practices, talent management, product safety and data security. It also covers governance matters like board diversity, executive pay and business ethics.
There has been a very high interest in ESG practices, especially during the past five years. Clients are now demanding high standards of sustainability and quality of employment from businesses. ESG practices mainly attract investors who are now more confident about the companies that they seek to collaborate with. The transition from Sustainability to ESG performance indicates a development of business practices to more precise tactics and strategies. Companies with high ESG performance have proven to have lower risks, higher returns, and are more resilient in times of crisis. In the overall turbulent financial times that we live in the adoption of ESG Practices demonstrates a company’s vision aligned with executive and employee’s purpose, respect towards the investors along with environmental and social prosperity. And this is a place were great things start to happen.