Current ESG reporting is disappointing

The most valuable tool for all companies is therefore a well-structured and transparent ESG report to show the actual measures and progress made in the area of sustainability. The most important thing here is to provide financially relevant information, such as the criteria identified by the Sustainability Accounting Standards Board (SASB), for each industry (SASB is an independent nonprofit organization that sets standards to guide the disclosure of financially material sustainability information by companies to their investors). However, as research from the Global ESG Monitor (GEM) led by cometis and market research institute Kohorten, along with PRGN partners Currie Communications (Australia) and Xenophon Strategies (Washington DC) showed, not every organization’s reporting is up to snuff. The reports of listed companies on DAX, EUROSTOXX, ASX 50 and Dow Jones include gaps, lack transparency and are superficial as they lack depth. Only 29 per cent of companies report financially relevant SASB information. The Dow Jones companies perform particularly poorly, with six of the worst 10 ESG reports.

Binding, internationally applicable guidelines on what sustainability reporting should look like do not yet exist. But they’re coming. In the EU, initial guidelines are already in place. It’s no coincidence that companies from the DAX and EUROSTOXX perform better in GEM than their American and Australian counterparts, but there is room for improvement worldwide. As a first step, it’s a good idea to look at the structure of an ESG report and start collecting data as early as possible. After all, pretty soon every company will be obliged to do so anyway.