Feeling confused about ESG reporting, or maybe even a little overwhelmed? With so much discussion around reporting requirements, it can be hard to stay abreast of everything.
As the focus on ESG accelerates, however, one thing is clear: government regulations around mandatory disclosure continue to increase in response to the most pressing issues facing global economies and the environment.
To help you cut through the chatter and get ahead of the reporting requirements coming down the track, AMCS takes a look at the regulatory horizon, highlighting four key trends that are shaping ESG reporting best practice, both now, and in the years to come.
climate accounting
In addition to the rise in voluntary net zero commitments, new regulations in nearly every industry from fashion to finance are prompting seismic shifts in how companies manage, measure, and report on their carbon emissions. Daunting as it may be to keep up with reporting requirements, both consumers and investors are beginning to demand compliance, which makes it key to organizational success. That means there are compelling reasons to take action on ESG issues including reducing your climate risk and improving your ability to secure capital and retain investors.
water stewardship
Water scarcity is already affecting every continent on our planet. Despite the emphasis on carbon, water is actually the greatest nature-related risk, with the CDP reporting 7-9% of global GDP is at stake. Yet water risk is not yet fully accounted for. This is beginning to change, however, and in response, expect new regulations and mandatory reporting requirements. Future-focused organizations know that addressing the water crisis by managing their water footprint reduces their risk and positions them to take the lead as responsible water stewards for the communities where they operate.
corporate responsibility
Employees have made it clear that not only do they have new priorities in evaluating employment, but they’re acting on them. Nearly 70 percent of employees say they wouldn’t work for a company without a strong purpose. Organizations that want to attract and retain talent in a competitive labor market must therefore be able to credibly demonstrate commitments to both their communities and employees. Looking forward, expect consumers and employees – particularly younger ones – to demand evidence of action. It’s no longer enough to simply say you have invested in social impact efforts. Increasingly, employees want to see measures and reports that quantify those actions.
supplier transparency
Volatility is reshaping supply chains across the globe. From geopolitical instability to extreme weather events, there are a host of challenges that currently create risk in our global supply chains. And while certain industries such as mineral extraction and manufacturing have been working to reduce supply chain risk for decades, supply chain transparency is now a necessity in every industry in order to identify and eliminate human rights violations and environmental harms. As a result, ESG leaders need processes in place to assess ESG performance in their supply chain and provide clear benchmarks that allow them to mitigate risk in supplier selection and management.
Overwhelmed by the ESG regulatory horizon? AMCS can help. Our comprehensive AMCS Sustainability Platform automates reporting to evolving ESG frameworks and standards. Helping you not only comply with mandatory disclosures, but also embed ESG performance at the heart of your business for a more profitable approach to sustainability.