ESG sustainability reporting has become an important component in defining how businesses operate today. In 2021, the total sustainable debt issuance hit a record high, and this is expected to keep growing in 2022. The challenge will be managing this debt amid growing concerns about greenwashing.
Corporate boards and leaders are expected to face more pressure to demonstrate that they understand ESG issues and are out to develop a clear path to restore the planet’s lost glory. These are only a few highlights of ESG sustainability reporting trends that are likely to dominate 2022.
In this post, we take a closer look at more trends that you should know about ESG reporting. We will also tell you how to get ESG sustainability reporting right with Diginex.
What is ESG Sustainability Reporting?
If you are a new corporate manager or entrepreneur, it will be an excellent idea to start by demystifying ESG sustainability reporting. This is the process of disclosing a company’s operations in three key areas, environmental, social, and governance. The reporting is aimed at giving stakeholders a clear view of how responsible and sustainable the business is.
Stakeholders, such as investors and customers, use this information to draw key decisions about the company. For example, investors coming to the New York Stock Exchange (NYSE) and Hong Kong Stock Exchange (HKEX) start by checking how committed the company of interest is to matters of environment, social justice, and leadership. Without a good ESG sustainability report, you are likely to lose because more stakeholders will opt to walk away.
We must say that ESG sustainability reporting goes far beyond creating the report. It is a “new” way of doing things where every system in your business is expected to shift focus towards sustainability. If all businesses on the globe operate sustainably, which includes taking care of the environment and being mindful of the communities, addressing the social ills would be way easier and faster.
Emerging ESG Reporting Trends for 2022
Now that you know what ESG sustainability reporting is all about, it is time to look ahead and ensure you get the process correctly. This should start with understanding the emerging trends to help you target areas that will win the affection of stakeholders:
New Regulations and Reporting Standards Will Call for Greater Focus on Credible Disclosures
Although big incorporations are leading the way in sustainability reporting, regulations and stakeholders are taking even greater caution. The primary concern is mainly greenwashing, and new regulations are expected to help address the concerns.
Institutions, such as the newly formed International Sustainability Standards Board (ISSB), will come in handy to help overcome these obstacles. Metrics, data, and reporting requirements will start getting harmonized so that companies can follow the same format for ESG sustainability reporting.
Businesses Will Face Growing Pressure to Deliver Zero-Emissions
One of the reasons why the Kyoto Protocol never reached its full objective is that short-term targets were not emphasized. In 2021, a lot of companies that set the target of hitting zero emissions by 2050 grew significantly. To avoid failed targets, just like the Kyoto Protocol, there will be increasing demand for short-term emission reduction.
As a manager or entrepreneur, these trends should inform your strategies for sustainability. Remember that as stakeholders become more critical of business activities, you must ensure that the report and process strictly adhere to ESG sustainability reporting principles.
Particularly, you must ensure that the process of data collection, analysis, and report creation is correct. So, make sure to have the best tools for the tasks, especially the best ESG sustainability reporting software. Visit Diginex.com for some of the best programs for sustainability management.