To give yourself (and others!) confidence in the progress that you are making, you may want to consider:
- Reviewing progress against your ESG plan
- Considering and recording your methods for monitoring and analysing outcomes. This may be a combination of quantitative (measurable, numbers-based) and qualitative (descriptive, interpretation-based) parameters:
- Key Performance Indicators (KPIs) for identified material topics (See ESG Stepping Stones one to eleven for KPIs)
- Feedback from internal and external stakeholders
- How often will you carry out reviews?
- How will you communicate the findings of your reviews to different stakeholders?
11.1. Disclosure to Stakeholders using known ESG standards and frameworks
Some businesses choose known ESG disclosure standards for monitoring and communicating their ESG performance to stakeholders. In most cases this is not mandatory but is used as a means of high-quality reporting and for complementing their ESG strategy.
See In Focus below for more thoughts.
In Focus: Standards and Frameworks
Depending upon where you are on your ESG journey any one or more of the following standards can be used
to disclose your ESG performance. Global Reporting Initiative (GRI)
– Task Force on Climate-related Financial Disclosures (TCFD)
– The Government’s Streamlined Energy and Carbon Reporting (SECR)
– Sustainability Accounting Standards Board (SASB)
– International Sustainability Standards Board (ISSB)
This is not an exhaustive list you may want to do your own research.
GRI is an internationally used, independent standards organisation, that has been helping define
how organisations communicate and demonstrate accountability for their impacts on the environment, economy and people.
More info on the standards can be found on www.globalreporting.org/
TCFD has already been made mandatory for large UK based firms, as per the
note published by Department of Business, Energy and Industrial Strategy in February 2022.
The TCFD recommendations on climate-related financial disclosures are widely
adoptable and applicable to organisations across sectors and jurisdictions.
The recommendations are structured to seek ESG information around four thematic
areas that represent core elements of how organisations operate: governance, strategy, risk management,
and metrics and targets. Find out more at www.fsb-tcfd.org/
The Government’s Streamlined Energy and Carbon Reporting (SECR) policy was implemented on 1 April 2019,
when the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018
came into force. Businesses in scope need to comply for financial years starting on or after 1 April 2019 and the reporting is in line
with TCFD recommendations. The SECR disclosure requirements published by the
Department for Business, Energy and Industrial Strategy can be accessed here.
SASB is another widely used disclosure standard. SASB Standards identify the subset of environmental,
social, and governance issues most relevant to financial performance in about 77 industries, including the insurance sector.
They are designed to help companies disclose financially-material sustainability information.
Please visit their website for more information on standard related to insurance: www.sasb.org/standards/download/
In June 2022, the Value Reporting Foundation (VRF), which saw SASB, and the
International Integrated Reporting Council (IIRC) merged into it in 2021, announced its merger
into the International Financial Reporting Standards (IFRS) Foundation as part of the
International Sustainability Standards Board (ISSB), which is in the process of creating a global,
comprehensive, sustainability disclosure standards. The ISSB intends to leverage the industry-specific
standards and standard-setting process developed by SASB in creating its standards.
More information on ISSB can be found on www.ifrs.org/groups/international-sustainability-standards-board/issb-frequently-asked-questions/.