What is ESG reporting?
ESG stands for Environmental, Social, and Governance, and ESG reporting is defined as “the disclosure of environmental, social and corporate governance data. As with all disclosures, its purpose is to shed light on a company’s ESG activities while improving investor transparency and inspiring other organizations to do the same”.
ESG reports commonly cover each topic area (environmental, social and labor, and governance), and for each, include information on:
- Assessed risks
- Actual impacts
- Quantitative and qualitative assessment of the company’s ESG activities (for instance, any policies, programs or actions that you have implemented to improve your impacts).
There are many different ESG reporting frameworks in use, but the most common frameworks are the Global Reporting Initiative (GRI), the Task Force on Climate-related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB), and the United Nations (U.N.) Sustainable Development Goals (SDGs).
Why is ESG reporting important?
Historically, ESG reporting has been voluntary. However new legislation will make comprehensive ESG reporting mandatory for larger companies.
For example, the EU Corporate Sustainability Reporting Directive (CSRD) will require companies to set targets and disclose progress across 10 topical areas (from biodiversity to marine impacts to climate change) — with data expected on 2024 impacts across multiple tiers of their value chain.
For facilities and manufacturers, this means that your brand partners may soon be requesting more data from you across a much wider range of sustainability topics.
How can I use Worldly data for ESG reporting?
The Higg Index tools, available on Worldly, can help your business collect value chain data to disclose impacts for ESG reporting.
- As a brand, use the Higg Facility Environmental Module (FEM) and Facility Social and Labor Module (FSLM) to establish the supply chain engagement infrastructure that’s necessary to identify, monitor, and remediate actual and potential harms — as well as to collect the primary manufacturing data needed to demonstrate progress towards targets;
- As a facility, use the Facility Environmental Module (FEM) to quantify your environmental impacts and map your practices to mitigate risks and reduce impacts. Use the Facility Social and Labor Module (FSLM) to track your Social impacts and policies and practices implemented to enhance workers’ well-being.
- Whether you are a facility or brand, you can use the Higg MSI (Materials Sustainability Index) and Higg PM (Product Module) to measure the footprint of your products and analyze where the environmental hotspots are across your product’s lifecycle.
- Lastly, the Higg Brand and Retail Module (BRM) offers sector-specific content guidance to support companies in their disclosures and can be used as a checklist for readiness for regulations like CSRD.
In summary, Worldly helps you collect the data that you need as input for determining relevant sustainability topics; setting goals and targets for impact improvement; and reporting on your progress across the Environmental and Social areas of ESG.
Worldly platform capabilities are not designed for the report-writing itself, or as a compliance-assurance tool for specific regulations.