If you want to be successful in your business, it is time to adopt ESG sustainability reporting. It is a process with its roots in the World Summit on Sustainable Development (WSSD) of 2002 and has been cited as the possible force to help address the social, governance, and environmental issues facing the planet. Although sustainability reporting was initially targeted at corporates, it has been expanded to include more stakeholders, and we are going to look at the governments’ involvement.
Understanding ESG Sustainability Reporting
According to the UN Secretary-General’s High-Level Panel on Global Sustainability, the global sustainability goals are targeted at reducing poverty levels, addressing inequality, and making growth inclusive while focusing on addressing challenges that face the planet. Therefore, sustainability reporting is communicating information crucial for understanding an enterprise’s economic value and promoting a sustainable global economy.
It is also crucial to appreciate that unlike the initial focus, which mainly focused on corporates’ economic, social, and environmental focus, the emerging standards have expanded it significantly. For example, the components of a sustainability report might be informed by the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises and ISO 26000. Therefore, it might include things such as the use of non-financial resources, waste production, pollution, and human rights due diligence.
Government Involvement in Sustainable Reporting
The government involvement in ESG sustainability reporting is based on the need to address the current global problems, which appear to be getting out of control. For example, biodiversity extinction, global warming, and pollution have reached alarming levels. This is part of the reasons why governments are working harder to prevent the globe from sinking into more serious issues:
Helping Stimulate Focus on Sustainability
ESG sustainability reporting offers corporates opportunities to craft objectives and adopt strategies for assessing non-financial risks to enhance the quality of social management. Therefore, the reporting acts as an important source of information to help governments understand and craft policies that will further push the sustainability agenda. With good policies on sustainability, more companies are added into the pool to help them understand and work towards a sustainable future. For example, more governments have been encouraging the use of technology to cut down emissions from vehicles.
Accelerating Transparency on Sustainability Targets
One of the main principles of corporate sustainability reporting is transparency. The goal is to ensure that the process of sustainability reporting correctly captures the goals set by a company and how effectively it is achieving them. This cannot be complete without highlighting the challenges therein. Because most of the efforts, be they training on sustainability or changing the design of your production system, comes with some costs, governments want to ensure that those not focused on sustainability do not get an undue advantage. The main target is ensuring that all businesses appreciate the crucial role of ESG sustainability reporting in addressing challenges in society.
While the goals and benefits of operating sustainably are evident, you need to appreciate that it is a process that requires effort and resources. This is why governments have come in to offer a hand and ensure that reporting is comprehensive and reliable. So, are you ready to take advantage of sustainability reporting to grow your business to the next level? Consider working with professionals, such as Diginex Solutions, the leading digital asset financial services and advisory company.