Less reporting, more coherence
Stakeholders' demand for transparency on the environmental, social and governance impacts of companies has grown considerably over the last ten years.
This increasing reporting demand responds to several challenges:
Comply with regulatory requirements (compliance)
Manage a CSR approach and performance through progress monitoring
Serve as a basis for the evaluation of 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 a company approach with clients (via platforms such as Ecovadis that rate suppliers)
Communicate with external stakeholders, such as NGOs, who can use transparent reporting as proof of the company's commitments
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 growing, investors and companies are warning against the inflating 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. Furthermore, these are not always relevant and lack standardization to ensure comparability of data on a sector or measure the progress of a company. (Lack of consistency)
To avoid the trap of excessive reporting coherence is an important element. (Coherence refers to the smooth and logical flow of a sustainability strategy toward its corresponding ESG reporting). Connecting the dots from analysis (materiality, risk & opportunities) to strategy (sustainability integration level) and to implementation (ESG focused deployment) is key to support a coherent ESG reporting platform.
This is what our coherence module is about: www.stratesgy.com/coherence