Mistakes in Corporate ESG Disclosures

ESG Reports hold greater risk of exposure to malpractices than any other form or type of non-financial reporting.  Therefore it’s imperative to be very careful in what you are reporting.

ESG factors are critically important for investment firms and exchanges and that’s why they this has built so much buzz too soon.  Because it works.  Organizations cannot lie anymore.

Organizations need to look at ESG Disclosures from 2 point of views, one is internal operational integration and 2nd is from the Investors Market. Both need to match, only then you would have successfully utilized the ESG concept for your business.

Don’t look at ESG Disclosure just to maintain and attract responsible investments into the company.

ESG also focuses on your internals risks and operational excellence.

Volume is more than

Length and Volume of the Report does not define or prove how the good the content is and how meaningful the report is. It’s important to check what we are reporting, how much of that information disclosed will impact the brand value and decision making for future investments and other expansion plans.

Internal committees who work on gathering the data also miss out on the key indicators and are often lazy to create or measure data.

We see that management does not bother to review the report before publishing and usually left to the head of communications to publish report. Head of communications may not understand many technical terminologies and calculations and how the data is derives, they often just look at the brand colors and offensive texts etc. and report it publically.

In current scenario risks involved related to ESG factors is bigger than the financial risks that is discussed on the board table.  All non-financial risks equally impact the performance of the company and in fact ESG factors can hamper the growth and employee performance.

ESG factors are great way to check the health of the company. ESG Disclosures is not just another Sustainability report where you can just write wishful optimistic essays of how you feel and shall do in future. Please don’t do that.

ESG report should be a value add in decision making. ESG will clarify the issues that are going inside the company. We can easily identify. You can’t just misstate the performances and improvement areas.

Companies will be scrutinized more now based on ESG Integrated data and statistics. ‘Good enough’ is no longer ‘Good Enough’.  Numbers can prove better that just’ good enough’. Don’t run away from numbers.