What is Environmental, Social, and Governance (ESG) ?

ESG refers to the three central factors in measuring the sustainability and ethical impact of an investment in a company or business. These factors are:

• Environmental: how a company performs in terms of environmental protection and management of environmental risks
• Social: how a company performs in terms of its social and economic relationships with stakeholders, such as employees, customers, and communities
• Governance: how a company is managed and directed, including factors such as executive pay and accountability

How can I start ESG reporting ?

To start the ESG reporting process, a manufacturing company can take the following steps:

i. Identify the key ESG issues that are relevant to the company's operations and stakeholders. This might include issues such as

• Energy use
• Water conservation
• Waste management
• Supply chain practices.

ii. Develop metrics and targets for measuring and improving the company's performance on these issues. This might include

• Setting targets for reducing greenhouse gas emissions
• Improving working conditions in the supply chain
• Increasing diversity and inclusion in the workforce

iii. Collect and analyze data on the company's performance on these issues, using tools such as

• Sustainability reporting frameworks and
• External audits

iv. Communicate the company's ESG performance to stakeholders, such as investors, employees, and customers. This might include

• Publishing an annual sustainability report
• Providing information on the company's website
• Engaging with stakeholders through events and workshops

v. Continually monitor and improve the company's ESG performance over time, including setting new targets and implementing programs and initiatives to drive progress. This might include working with industry groups and other organizations to share best practices and drive change across the industry.

ESG Reporting Frameworks & Standards

ESG frameworks and standards are both tools that companies can use to guide their reporting on environmental, social, and governance (ESG) issues. However, there are some key differences between the two.

ESG Frameworks are typically broader in scope and provide a high-level overview of the key sustainability issues that companies should consider in their reporting. They often include guidelines on what information to include in an ESG report and how to present it, but they do not provide detailed requirements or metrics for measuring and reporting on specific ESG topics.

There are several frameworks that companies can use for ESG reporting, including:

• Global Reporting Initiative (GRI)
• Integrated Reporting Framework
• Sustainability Accounting Standards Board (SASB)
• Task Force on Climate-related Financial Disclosures (TCFD)
• Carbon Disclosure Project (CDP)

ESG Standards, on the other hand, are more specific and focused on particular aspects of sustainability. They often include detailed requirements and metrics for measuring and reporting on specific ESG topics, such as greenhouse gas emissions or workplace safety. These standards are often developed by industry groups or regulatory bodies and can be mandatory or voluntary.

Some examples of ESG reporting standards include:

• GRI Standards: A globally recognized framework for reporting on a range of sustainability issues
• SASB: A framework for reporting on material sustainability issues in the financial sector
• TCFD: A framework for reporting on climate-related risks and opportunities
• ISO 26000: A globally recognized standard for corporate social responsibility
• ISO 14001: A standard for environmental management systems

In summary, ESG frameworks provide a general overview of sustainability reporting, while ESG standards provide specific guidance on how to measure and report on specific ESG topics. Companies can use both frameworks and standards to guide their ESG reporting and ensure that it is comprehensive and compliant with industry best practices.