Why ESG reporting? Top 5 reasons

Understanding the reporting context

We are living in a climate emergency, and understanding environmental and social risks has become increasingly important for companies and for investment decisions.

‍ESG criteria are now an integral part of risk management strategies, and tracking ESG indicators enables companies to improve their social and environmental impacts. But the benefits of ESG reporting don't stop there! Here are our 5 good reasons for ESG reporting.

But first, let's go back to basics: what does ESG mean and what is ESG reporting?

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What does ESG mean?

ESG is an abbreviation (Environmental, Social and Governance) commonly used to designate all the extra-financial impacts of companies, such as greenhouse gas emissions or the management of health and safety risks for employees.

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What is ESG reporting?

ESG reporting consists of disclosing information aimed at transparently showing a company's performance in three key areas: environmental sustainability, social sustainability and corporate governance.

To promote the transition of capital and investments towards more sustainable models, the European regulator has considerably tightened the rules applicable to financial players, requiring them to communicate transparently on the impacts of their investments.

In order to meet these obligations, investors rely on ESG reporting data to make investment decisions or analyze the impacts of the companies in their portfolios, prompting a growing number of companies to implement ESG reporting.

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5 good reasons for ESG reporting

1 - ESG reporting improves a company's attractiveness and competitiveness

‍Stakeholderexpectations of extra-financial performance are exploding from all sides: employees, customers, business partners, investors. They all expect companies to better monitor and manage their impacts. Implementing ESG reporting enables a company to meet all these expectations, and thus enhance its attractiveness and brand image.

Conversely, companies that fail to do so are likely to suffer the consequences:

• Loss of customers and markets
• Unattractive to new talent
• Loss of confidence on the part of investors, who prefer to invest in companies that measure their risks.

ESG reporting is therefore an important confidence-building measure for stakeholders. In this article, we share with you 3 steps to getting ESG reporting off to a good start.

2 - ESG reporting helps identify and anticipate corporate risks

The risks associated with extreme climatic events that are set to multiply, or with modern slavery in supply chains, are among the greatest risks facing companies. Companies that implement ESG reporting can anticipate, identify, mitigate and address vulnerabilities before they become a problem, by implementing sound environmental and social strategies based on ESG reporting data.

3 - ESG reporting reduces operating costs

ESG reporting enables companies to collect reliable ESG data, enabling them to make more efficient and strategic budget allocation decisions. And consequently reduce operational expenses such as energy, water or waste costs.

4 - ESG reporting limits the risk of unintentional greenwashing

Companies that do not set up ESG reporting systems are not transparent with their data. Or those that focus on the wrong indicators (or indicators of little relevance to their sector of activity), and consequently communicate on erroneous data, have a higher risk of being accused of greenwashing. Tracking the right ESG indicators can help companies prevent this risk.

Implementing ESG reporting within your company helps cultivate a culture of transparency around data, and consequently boosts the trust placed in your brand by investors, employees and customers alike. As you begin your ESG reporting, remember that transparency and continuous performance improvement are more important than perfection.

5 - ESG reporting helps anticipate regulatory requirements

ESG regulations are becoming increasingly stringent and numerous(like the CSRD), and the publication of ESG data is gradually becoming mandatory for all companies. Get ahead of the game, anticipate regulatory requirements and start preparing your ESG reporting before it becomes mandatory.

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‍How to set up ESG reporting? Beavr can help

Implement your ESG reporting strategy with Beavr to easily collect, analyze and exploit your company's ESG data.

• Structure and automate low-value-added tasks such as data collection.
• Reuse the data collected for all your needs: certification, communication, ESG reporting.
• Track your progress and make the right decisions to improve your impact and limit your risks.