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Now that ESG is a major decision driver for investors, ESG reporting has never been more important to your organization.
These metrics and disclosures reveal your organization’s impact on various environmental, social, and corporate issues. How well you perform in these categories can attract the right investors to your stock.
ESG funds are some of the fastest-growing players on the market today, with sustainable investments more than doubling from 2019 to 2020, according to research organization Morningstar. Another study estimates one in every three dollars of US assets goes toward sustainable investing.
This growth reflects public concerns over climate change, wealth inequality, racial injustice, and the ongoing pandemic.
If you aren’t sure how you can emphasize your role in these issues in a way that drives value, it’s time to focus on your approach to ESG reporting. Here are three ways you can put your good deeds on the map.
1. Choose IR Tools That Naturally Integrate ESG Reporting
First of all, you’ll need a place to display your ESG initiatives, and there’s no better place than your IR website. This is one of the first places investors visit when researching their options, and they expect to find all the key data in one place.
Sharing your sustainability message is easy when you choose full-suite investor relations software that puts all your data onto one platform. The top investor relations services provide software that fully integrates your ESG performance into your overall investor data, simplifying how you map your performance.
This top-down consolidation helps you communicate your ESG performance in a clear, engaging way that fits into the rest of your brand story. Better still, it compels people to invest.
2. Achieve Relevant ESG Compliance
As sustainable and ethical funds grow exponentially in popularity, the regulatory framework for ESG compliance strengthens in stride.
These regulations are moving beyond voluntary disclosures to include mandatory reporting standards set by individual third-party institutions, including the Global Reporting Initiative, Sustainability Accounting Standards Board, and the Sustainable Development Goals.
As ESG reporting continues to gain importance, some big-name institutions have begun the campaign to unify these standards. The DSB, IIRC, and SASB are working to create a framework that regulates sustainability disclosures to complement other important filings, and the SEC is expected to release its standards soon.
It’s up to your organization to understand your obligations as current and emerging standards change to ensure you meet compliance at every step.
3. Check Your ESG Ratings
Many investors look to your ESG rating to decide whether you belong in their portfolio. These scores provide a metric of performance that helps people understand your commitment to sustainability at a glance.
With this in mind, your rating must impress anyone who looks. The grade you earn depends heavily on transparency, and you’ll get dinged if your reporting omits any important data or makes unsubstantiated claims.
For more guidance, you should check with organizations that provide these scores to understand their rubric for success, filling in any gaps in your strategy to ensure the best marks.
Communication is Key, But Data is Better
When investors base a large portion of their decision-making on the social cachet of organizations, your reputation falls to the contents of your ESG reports. Make sure yours is ready for scrutiny by improving your rating, achieving compliance, and nestling your reporting into your overall investor relations strategy. These tips can help substantiate your sustainability and attract investors.
