Recently, NAVEX hosted the webinar, “ESG Standards: The Road Ahead”, where ESG experts discussed what organizations should prepare for when standardized disclosure takes effect. This post is the first installment dedicated to answering your questions from the session.
Can you highlight some of the differences between private/public companies – do private companies have a temporary shield/longer runway to prepare or not anymore?
Rules from regulating bodies such as the US SEC and EFRAG apply to public companies. However, we hear from our customers and audience members that work at privately held companies that they are also being asked to provide data on ESG performance. This is typically from private investors, or if the company is a B2B supplier whose customers are asking for ESG information.
Interesting you say compliance should be responsible for sustainability – are you talking about the report or the strategy?
Depending on the size and characteristics of the given company, responsibility for ESG varies. Many larger companies will appoint a senior sustainability leader or chief sustainability officer to oversee sustainability strategies (net zero commitments, circular economy etc.). However, for smaller, less mature companies who are just getting started with ESG, we see legal and compliance – or in some cases hybrid ESG/Compliance roles being tasked with implementing a holistic E, S, and G risk management and reporting strategy. In fact, 89% of recent compliance professionals surveyed by NAVEX say that they now include ESG reporting as a part of their compliance program.
What types of stakeholders should be included in the materiality assessment? How often should it be conducted?
A materiality assessment considers the perspectives of both internal and external stakeholders. These could include the board of directors, senior management, employees, customers, and investors. The concept of “double materiality” prescribes an assessment that analyzes both financial and non-financial risks. “Dynamic materiality” refers to the fact that material issues will evolve over time and therefore an assessment needs to be re-calibrated or re-conducted to consider the given ESG risks that are currently in the market and regulatory landscape.
What are a few of the best guides for GHG calculations?
The GHG Protocol and the Taskforce for Climate Related Financial Disclosures (TCFD) are great resources for understanding how to account for GHG emissions as well as analyze climate-related risks.
Getting started with ESG can be intimidating for organizations that are still figuring out how to allocate resources and who should lead the efforts. NAVEX is dedicated to providing resources and materials to help organizations get started in their ESG journey.
For a comprehensive guide to getting started, download the Definitive Guide to ESG.
To watch the ESG Standards: The Road Ahead webinar