The ESG landscape has become increasingly vast and complex. There are now a great number of ESG initiatives and reporting frameworks, which have made it exceedingly difficult to navigate the landscape. How and where to start if you are disclosing for the first time? Our Head of ESG, Jacqueline Faridani has selected some of the major frameworks fund managers should consider before making a start on ESG reporting.
Companies are now expected to report their ESG performance and risks. Basic ESG reporting will soon be mandatory in the EU, and for publicly listed companies in the US under the SEC. Failure to disclose ESG information could result in fines, shareholder action and divestment.
With ESG reporting and compliance are now becoming increasingly critical, largely in response to investor interest, understanding and navigating the reporting and regulatory landscape is now crucial for business.
The different frameworks focus on different areas and metrics. To decide which framework is relevant to a company’s activities, one must first consider the ESG ‘stakeholders’ (investors, employees, governments, insurers, boards, etc). Who are your key stakeholders and what do they want to see reported? Based on this, you will find several frameworks that are aimed at investors primarily, while others are relevant to a broader audience.
Below are some of the major ESG Initiatives and Reporting Frameworks that are relevant to financial businesses and fund managers.
United Nations Initiatives
Established in 2012 and applied by more than a quarter of the world’s insurers. Learn about its four principles here.
3. United Nations Sustainable Development Goals (SDG)
SDGs represent key global challenges in the areas of inequality, poverty, environment, climate change and peace and justice and were agreed on by all UN members in 2015. Even though the 17 SDG goals are aimed primarily at governments, many businesses and investors are reporting on their impacts on SDGs.
The 17 goals are shown below:
Conclusion on ESG Initiatives And Reporting Frameworks
Dr Jacqueline Faridani
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