Closing the ESG gap in corporate reporting

Podcast host Myles Corson welcomes Brian Tomlinson, Director of Research, CEO Investor Forum, Chief Executives for Corporate Purpose (CECP), and Marc Siegel, a member of the Sustainability Accounting Standards Board (SASB) and EY partner. Together they discuss the acceleration of ESG, or environmental, social and governance topics in corporate reporting. Their conversation also considers the increasingly vital role ESG plays in investor communications and what investors are looking for companies to disclose.

There has been an acceleration in the volume of ESG information that is being shared on earnings calls, and differing approaches used. This episode takes a deeper dive into these emerging reporting issues and how they can support value creation.

The CECP was founded with the vision that CEOs and the companies they lead should be a force for good in society. CECP has developed that mission to help companies focus on their developing social strategy, improving their community relations, and overall allowing companies and their leaders to be a positive force for good.

Now more than ever it’s important for companies to ensure that they are providing a more comprehensive picture of how they create value over the long term and how they communicate this through investor relations (IR) and other stakeholder engagement. An effective ESG strategy is integral to presenting long-term prospects.

In response to the COVID-19 (COVID) pandemic, investors have also been looking for companies to provide timely information on in how they are adapting in a rapidly changing environment. Many investors were asking for details on health, safety and productivity of the workforce, such as access to personal protective equipment (PPE).

A complex ecosystem of ESG organizations exists for companies to navigate. The World Economic Forum’s International Business Council (WEF-IBC) recently proposed a set of common metrics for measuring long-term value creation. The metrics derived from existing standard setters such as Sustainability Accounting Standards Board (SASB), Global Reporting Initiative (GRI) and Task Force on Climate-related Financial Disclosures (TCFD) enable consistent and comparable ESG disclosures across industries and geographies.

Key Takeaways:

• Articulate progress on your long-term strategy against a broader set of financial and non-financial key performance indicators (KPIs) including ESG related targets.
• With an increased focus on diversity, inclusion and employee health, spending time on an earnings call, or at the AGM (annual general meeting), lets investors hear how companies are progressing their people agenda.
• Regulatory and market-driven initiatives around ESG are moving very quickly and could have significant impacts. Continue to monitor this evolving space and evaluate how best to reflect what is important to your business.