Post by account_disabled on Feb 28, 2024 0:27:34 GMT -5
For many years, most of the pressure from investors and stakeholders pressure on ESG issues has focused on large companies. In fact, recent results from The Conference Board in collaboration with Esgauge and Heidrick & Struggles show that the majority of smaller publicly traded companies remain on the sidelines of sustainability disclosure.
But with the U.S. Securities and Exchange Commission's (SEC) ESG disclosure rules around the corner, investors expect corporations regardless of their size to do more in IS G.
Sustainability reports for SMEs will be required
According to GreenBiz , SME CEOs may be drawn to dismiss sustainability reporting as something exclusive to large multinationals.
However, last year shareholders voted on 15 resolutions on environmental and social issues at Russell 3000 companies (which includes almost all publicly traded companies) with less than $5 billion in revenue. In particular, six of these resolutions were approved.
sustainability reports for SMEs importance
The days of 100-page, phone book-style Changsha Mobile Number List sustainability reports are over. Instead, effective reporting that focuses on a handful of ESG issues will be sought. As stakeholders expect data on a wide range of issues, even some ESG issues have become table stakes, regardless of whether the company considers them important.
How can companies (especially smaller ones, which may be new to sustainability disclosure) focus their sustainability reporting on the most important topics while meeting stakeholder requests ? disclose broader information?
The tiered approach
Taking a phased approach to sustainability disclosure could help them. This involves highlighting the company's sustainability on high-priority ESG points, while using complementary data-rich communications for the next level of topics, those that may not be very important to the organization but are important to stakeholders . . These supplements can be stand-alone documents, such as data sets or a searchable database.
Implementing this type of tiered disclosure allows corporations to provide data on a variety of ESG issues, while keeping their narrative focused on the most prominent ones.
sustainability reports for SMEs levels
This is especially true for SMBs that have to play catch-up. In fact, The Conference Board's analysis of ESG numbers reported by US public companies reveals that the largest S&P 500 companies have disclosure rates 60% higher than the S&P MidCap 400, per term. half.
When examining companies' disclosure across a selection of 10 environmental and social metrics (such as greenhouse gas emissions, water consumption and gender diversity in management), on some parameters the difference was much elderly.
Catch up on climate information dissemination
More than half (54%) of S&P 500 companies disclose climate-related risks in their annual reports, and 71% report their greenhouse gas emissions. By comparison, only a third of S&P MidCap 400 companies publish climate-related risks, and 28% report their emissions.
The gap widens when looking at disclosure of Scope 3 emissions: only 13% of S&P MidCap 400 companies report these emissions, compared to 43% of the S&P 500.
SMEs, in particular, must step up their climate reporting. In doing so, they will need to address both their impact on the climate and the east's impact on them.
Managers must understand the potential impact their company can have on the climate, not only through its own operations, but also those of its entire value chain .
It is also important to consider the full range of potential impacts that climate change can have on the company, such as climate change on operations, costs and income; previous suppliers, business partners and subsequent customers; employees and communities; and the laws and regulations under which it operates.
Water will be a major ESG disclosure topic
Investors are increasingly interested in knowing a company's risks when it comes to water, specifically in the amount it extracts from areas with supply problems. It is not an insignificant amount: According to the 93 US corporations that report this information, an average of 16% of the water they use comes from regions with scarcity.
But with the U.S. Securities and Exchange Commission's (SEC) ESG disclosure rules around the corner, investors expect corporations regardless of their size to do more in IS G.
Sustainability reports for SMEs will be required
According to GreenBiz , SME CEOs may be drawn to dismiss sustainability reporting as something exclusive to large multinationals.
However, last year shareholders voted on 15 resolutions on environmental and social issues at Russell 3000 companies (which includes almost all publicly traded companies) with less than $5 billion in revenue. In particular, six of these resolutions were approved.
sustainability reports for SMEs importance
The days of 100-page, phone book-style Changsha Mobile Number List sustainability reports are over. Instead, effective reporting that focuses on a handful of ESG issues will be sought. As stakeholders expect data on a wide range of issues, even some ESG issues have become table stakes, regardless of whether the company considers them important.
How can companies (especially smaller ones, which may be new to sustainability disclosure) focus their sustainability reporting on the most important topics while meeting stakeholder requests ? disclose broader information?
The tiered approach
Taking a phased approach to sustainability disclosure could help them. This involves highlighting the company's sustainability on high-priority ESG points, while using complementary data-rich communications for the next level of topics, those that may not be very important to the organization but are important to stakeholders . . These supplements can be stand-alone documents, such as data sets or a searchable database.
Implementing this type of tiered disclosure allows corporations to provide data on a variety of ESG issues, while keeping their narrative focused on the most prominent ones.
sustainability reports for SMEs levels
This is especially true for SMBs that have to play catch-up. In fact, The Conference Board's analysis of ESG numbers reported by US public companies reveals that the largest S&P 500 companies have disclosure rates 60% higher than the S&P MidCap 400, per term. half.
When examining companies' disclosure across a selection of 10 environmental and social metrics (such as greenhouse gas emissions, water consumption and gender diversity in management), on some parameters the difference was much elderly.
Catch up on climate information dissemination
More than half (54%) of S&P 500 companies disclose climate-related risks in their annual reports, and 71% report their greenhouse gas emissions. By comparison, only a third of S&P MidCap 400 companies publish climate-related risks, and 28% report their emissions.
The gap widens when looking at disclosure of Scope 3 emissions: only 13% of S&P MidCap 400 companies report these emissions, compared to 43% of the S&P 500.
SMEs, in particular, must step up their climate reporting. In doing so, they will need to address both their impact on the climate and the east's impact on them.
Managers must understand the potential impact their company can have on the climate, not only through its own operations, but also those of its entire value chain .
It is also important to consider the full range of potential impacts that climate change can have on the company, such as climate change on operations, costs and income; previous suppliers, business partners and subsequent customers; employees and communities; and the laws and regulations under which it operates.
Water will be a major ESG disclosure topic
Investors are increasingly interested in knowing a company's risks when it comes to water, specifically in the amount it extracts from areas with supply problems. It is not an insignificant amount: According to the 93 US corporations that report this information, an average of 16% of the water they use comes from regions with scarcity.
