ESG and Transparency
Stakeholders' demand for transparency on the environmental, social and governance impacts of companies has grown considerably over the last ten years.
This reporting responds to several challenges:
• Comply with regulatory requirements (compliance)
• To manage an organization ESG approach and performance through progress monitoring
• To serve as a basis for the evaluation of a company performance by investors, possibly via the analyses of rating agencies, and increasingly by banks (for impact loans, for example).
• Communicate and give credibility to the business approach with clients (via platforms such as Ecovadis that rate suppliers)
• Communicate with external stakeholders, such as NGOs, who can use it as proof of the company's commitments
• Give credibility to an ESG approach through indicators that can be audited by independent third-party organizations and/or sustainability labels.
In addition to investors, who are the primary recipients of ESG reporting, NGOs in particular have used this information to denounce the greenwashing of certain companies. On the other hand, ESG reporting data can give credibility to a company's approach with its various stakeholders: clients, banks, NGOs, investors, journalists, etc.
However, while the demand for transparency is increasing, investors and companies are warning against the increasing volume of non-financial information. The time and resources mobilized to compile it are limited by the multiplication of questionnaires sent out by the various rating actors. And these are not always relevant and lack standardization to ensure comparability of data on a sector or measure the progress of a company.
Our coherence module helps avoiding the risk of over-reporting. It forms the background for formulating the "narrative zero" of a company ESG approach. www.stratesgy.com/coherence