The US Chamber of Commerce Center for Capital Markets Competitiveness released an "ESG Reporting Best Practices" guide to assist companies in developing or enhancing their voluntary ESG disclosure (i.e., outside the context of material information required to be included in SEC filings) and advance an approach that may eliminate the perceived need by some for regulatory mandates.
Chamber EVP Tom Quaadman summarized the best practice takeaways in the Chamber's release:
Corporate ESG reporting should:
- Be tied to long-term value creation
- Consider the audience
- Be written in plain English and clearly describe the metrics used
- Be overseen by someone who owns sustainability reporting at the company
- Fit the needs of that particular company and industry
The guide also promotes easy access to companies' ESG information and a rigorous internal review process to ensure reliability of the information and mitigate disclosure risks. While comparability across companies and - relatedly - the various ESG disclosure frameworks and standards, are noted as considerations, the guidance stresses a company-specific approach that supports individual company discretion and judgment to determine which ESG factors and metrics are important to the business and the associated disclosure in lieu of standards/framework-driven disclosure.
Mr. Quaadman touted the Edison Electric Institute (EEI) and the American Gas Association (AGA) ESG reporting template (which we initially reported on here - see "Industry Association Launches Voluntary ESG Reporting Template") as illustrative of a private sector-developed solution that other companies should consider to promote industry-relevant disclosure practices. He also noted that the EEI/AGA initiative reportedly has influenced the withdrawal of a significant number of shareholder ESG-related proposals at member companies.
Access additional information & resources on our Sustainability/ESG page. This post first appeared in the weekly Society Alert!