Today, many companies are increasingly faced with ESG reporting obligations. As the global community becomes more aware of the effects of climate change and environmental degradation, companies are under increasing pressure to operate in a more sustainable and responsible manner, including operating with an “E” section on ESG.
But what exactly is ESG ? ESG is an acronym for Environmental, Social, Governance and refers to the obligation to report on non-financial aspects. In a sustainability report, a company must faithfully and accurately reflect its impact on these three issues. Companies that take ESG factors into account take steps to minimise their negative environmental and social impact.
What does the “E” in ESG stand for?
The role of E in ESG is very broad and covers many factors, such as greenhouse gas management, energy efficiency, water management, biodiversity conservation and responsible waste management.
Key areas of environmental protection
According to the ESG reporting guidelines what are they and what benefits can they bring? prepared by the European Stock Exchange and the European Bank for Reconstruction and Development, environmental issues in companies’ sustainability reporting mainly concern :
- climate change mitigation and adaptation,
- energy management,
- pollution and waste,
- water and marine resources,
- protection of biodiversity and ecosystems,
- the use of resources and a circular economy.
Environmental factors (E) refer to how a company uses natural gambler data resources and what impact it has on the environment through its activities.
The above description is only a general outline of the requirements and applies only to key areas of information in this topic.
Why is the E in ESG important?
The “E” in ESG often attracts the most attention from organizations, and rightly so. Not europe cell phone number list only because it has a direct impact on our world, but also because environmental issues pose a serious threat to the society in which the company operates. However, the “S” and the “G” play an equally important role in the functioning of the organization and should not be overlooked or ignored.
Climate change is one of the most serious issues facing humanity and, due to its potential impact on all aspects of our lives, is widely highlighted when assessing ESG factors. In addition, the regulatory changes required to combat climate change require organizations to be able to plan and respond to changes introduced by governments.
How a company addresses environmental issues such as greenhouse gas emissions, carbon footprint, resource consumption, waste policies and energy needs is analysed in detail and taken into account in the organisation’s environmental audit. In addition, organisations are pressured by consumers, investors, shareholders and communities to demonstrate responsible and sustainable practices by disclosing their environmental activities and impacts.
Today, people are more informed than ever about sustainability and their own impact on the climate. As a result, society expects companies, organizations and businesses to be more committed and responsible in terms of environmental issues.
Advantages and challenges of environmental information
Advantages of reporting on the environment
- Capital raising
In the world of investors, we can see a trend of interest in ESG reports. The fact that a company has sustainability certifications or regularly publishes corporate social responsibility content on its website can have a very positive impact on the valuation of an investment. Thus, sustainable companies have easier access to capital and are valued more highly than other companies.