New environment, social, and governance (ESG)-related reporting and disclosure rules are pushing businesses to seek help from fit-for-purpose ESG reporting and analytics vendors. Investors and business leaders are also looking beyond mere ESG compliance and risk management to assets and opportunities that can show brand- or fund-differentiating impact through analysis of ESG data. To provide guidance in this space, we have just published a New Tech landscape report for ESG reporting and analytics vendors. Here’s why you’ll want to read our research:
- ESG reporting and disclosure will become more complex … As a result of the global ESG push, the number of reporting frameworks and governmental bodies making ESG rules is increasing. Specific regulations per industry will become more relevant and will require a deeper level of detail and disclosure based on the particular materiality of your company.
- … but also more standardized. Some of the leading standard-setters are working on creating common frameworks and merging to simplify and ease the regulatory burden. The European Commission’s Corporate Sustainability Reporting Directive Proposal set a trend towards harmonization. Consequently, reporting organizations CDP, CDSB, GRI, IIRC, and SASB presented their Statement of Intent to Work Together Towards Comprehensive Corporate Reporting.
- Dynamic materiality will add another dimension to reporting and analytics. Factors like emerging technologies, new knowledge, new regulations, and global events such as the COVID-19 pandemic impact materiality over time — something traditional ESG data and reporting have not accounted for. Now, governments and investors want to take these systemic changes into account. For example, the Bank Of England will subject leading banks and insurers to climate stress tests that assess a business’s preparedness for a net-zero carbon economy or extreme weather events.
- More mandatory universal disclosures will come. Governments globally face pressure to meet internationally approved goals, such as the Paris agreement, and have stepped up legislation on the environmental impact of companies. In the US, the SEC is already considering compulsory disclosures, as is Japan’s FSA. In Europe, mandatory disclosures have been in place since 2016, and new ones coming into force this year impose further requirements (which are also more useful for investors and analysts).
Business leaders, asset and portfolio managers, and heads of reporting should use our recently published New Tech: ESG Reporting And Analytics, Q3 2021 to understand the capabilities of emerging vendors within major segments of this market and to inform their technology strategies and stay up to date with global reporting standards.