How can ESG reporting help your company create long-term value?

When it comes to enhancing your reputation using ESG reporting, companies must ensure they do not fall into a "greenwashing" trap. Transparency is key! Make sure you tell the whole story, share your successes and your struggles. Everyone struggles, the question is what are you planning to do about it. Be honest, and provide solutions.

ESG reporting is providing quality information to various stakeholders in a transparent manner - which reflects well on how responsible, accountable an organisation is towards environment and community at large. This will add further in creating responsible products and brands, which will be consumed more consciously by consumers. The future of products and brands will not be determined by just marketing, but conscious design of the products and impact they will have long term in lives of consumers, society and environment at large. Hence ESG reporting is leading the way - for both organisations and consumers to become more conscious about their choices.

?? This question is the most important one business leaders have in terms of sustainability. Experts have to address it like this: 1) Customer perspective: It simplifies decision-making for customers, giving them clear reasons to choose your products and services. 2) Talent perspective: It enhances your company's appeal to prospective talent. 3) Financial perspective: It broadens your access to capital and improves your loan agreement terms.

Performance, transparency, and reporting on ESG risks, impacts, and opportunities have become increasingly important for attracting and retaining top talent. Employees are a critical stakeholder group, instrumental in shaping and embodying the organizational culture. Additionally, younger generations view their jobs as an extension of their values, a place where they can make a positive impact and leave a lasting legacy. By prioritizing ESG reporting and, more importantly, ESG performance, a company can foster employee loyalty and confidence, ultimately helping to attract and retain the right people.

In a lecture where I was the mediator, we received a question directed to the Brazilian company 'Mercur': 'Do you affirm that ESG helps retain talent?' and the sustainability coordinator's response was: 'Yes, we don't aim to retain anyone, but we strive to be attractive so that they want to stay.' Implementing ESG requirements in your company can become a powerful benefit in the medium term, as social practices can create genuine connections with your collaborators, fostering a common purpose of adding value with the company's products and contributing to a better world, with a focus on developing better practices.

ESG reporting can significantly enhance operational efficiency and spur innovation within your company. By tracking and disclosing ESG performance, you identify key risks and opportunities, enabling targeted improvements in areas like climate response, human rights, and resource management. Setting clear targets and monitoring progress leads to cost reduction, optimized resource use, and minimized impacts. This process not only fosters continuous improvement but also positions your company as a leader in sustainable innovation.

Innovation also comes from benchmarking yourself against your peers, and identifying areas where you can be unique. Use ESG as a driver for intrapreneurship, let your team be creative and find solutions.

When we talk to investors, one thing keeps on coming up: they want quality data. When you go about creating an ESG report, don't underestimate the importance of collecting and sharing quality data. Don't just let the words tell the story, the numbers tell a story as well!

A strong ESG proposition can improve investment returns by allocating capital to more promising and more sustainable opportunities (for example, renewables, waste reduction, and scrubbers). It can also help organizations avoid stranded investments that may not pay off because of longer-term environmental challenges.

By getting "practice" doing ESG reporting, companies will find it easier to apply for and issue green/ sustainability-linked/ green loans and bonds respectively. The frameworks are different (e.g. ICMA Green Bond Principle), but the basics remains the same.

ESG reporting offers a medium for open communication with various stakeholders such as investors, clients, staff, suppliers, and communities. Through the disclosure of pertinent ESG data, your company can cultivate trust, encourage constructive conversations, and showcase dedication to ethical business conduct, ultimately enhancing stakeholder engagement and loyalty.

One key thing to remember is that the process of creating an ESG report serves as a gap assessment. If you go through the process the right way, conduct a materiality assessment, choose your disclosures and collect your data, you are bound to find areas for improvement. Using a 3rd party to assist with the process is beneficial as they can assist in uncovering your blind spots and provide an external perspective.

ESG reporting in tourism and hospitality is becoming increasingly complex, demanding specialised knowledge beyond traditional roles. Addressing issues like climate change, emissions, supply chains, and biodiversity requires a deep understanding of the industry's ecosystem. With reputational and regulatory risks at stake, upskilling is essential for the future. EarthCheck can help manage these risks, enhance reporting, and train staff, preparing for the inevitable mandate of ESG reporting. Building skills now is crucial for future readiness. Have a read of our latest paper on ESG reporting from our "Research" section of our website.

The sustainable company is made up of sustainable people. Do you want to innovate? Increase revenue? Retain talent? Grow? Be a reference in the field? That's the dream of every company, isn't it? To achieve all this development beyond expectations, it is advisable to focus on developing ESG practices. Not just reports, but by taking genuine actions. Over time, by observing all the previous reports, you will realize that ESG can transform the image and identity of the company!

ESG reporting is the cornerstone for companies to demonstrate their sustainability efforts and strategies effectively. Companies can cultivate long-term value by prioritizing risk management, bolstering reputation, nurturing employees and communities, and adhering to regulatory standards. Moreover, fostering environmentally, socially, and governance-aligned innovations is paramount for sustainable growth and acceptance.