ESG Reporting and Sustainability Advisory

Environmental, social and governance (ESG) reporting, together with sustainability is an increasingly vital matter to consider in financial statements. Organisational reporting is evolving with demand for integrated reporting that clearly articulates the business model, strategy and connects financial and non-financial value drivers of key information.

In terms of an ESG and sustainability strategy, boards must now consider what is known as a 'triple bottom line' (TBL) when it comes to producing financial statements for their company. The three components: consideration of the planet (environmental sustainability), people and community (social responsibility) as well as profit. TBL along with a strong governance model is not only good for corporate brand and goodwill, additionally, not being prepared or ignoring is to risk missing out on large amounts of potential capital as responsible investors restrict investment from assets they consider unsustainable or unethical.

Stakeholders, including clients, employees and regulators, are increasingly expecting organisations to demonstrate value creation beyond traditional financial metrics and outputs. These expectations are supported by an increasing amount of research and market evidence arguing that organisations which incorporate ESG data and narratives into annual financial disclosures can realise additional benefits.

Some of the benefits identified include increased employee engagement, heightened trust of stakeholder partners together with better investor visibility of prospects and governance. Explaining how financial and non-financial performance factors are connected as well as measuring the impact they have on strategy, resource allocation and stakeholder communities is gaining momentum across the world.

Greater integrated thinking and decision making, taking into account a wider array of issues, risks and opportunities, is resulting in the creation of an integrated reporting regime (IR).

IR supports organisations in telling a more meaningful story about how they define, create and maintain/increase/decrease value for themselves and key stakeholders now and in the short, medium and longer-term future. The integration of material financial and ESG information is allowing more informed decision making and development of smarter KPIs and KRIs.

BDO's ESG assurance team can help be a driving force for organisations to set out an IR strategy and integrate sustainability into their business that could bring additional value to the organisation. Our ESG team possesses in-depth knowledge and experience and can assist you to enhance your ESG/sustainability reporting process and at the same time to provide the following services at your demand:

• Stakeholder survey and analysis
• ESG prospectus certification
• Annual certification for continuing obligations
• Assurance support using ISAE3000