You can’t manage what you can’t measure.—Peter Drucker
Abstract: In recent years, the financial world has witnessed a significant shift towards sustainability, with a keen focus on how businesses impact the environment and society and how they govern themselves. This movement is encapsulated in the concept of environmental, social, and governance criteria, which have become crucial indicators for investors and stakeholders aiming to make responsible and sustainable investments. While there are as yet no universally standardized ESG reporting requirements, regulatory bodies and investors increasingly emphasize the importance of ESG disclosures. Some investors acknowledge the potential financial impact of ESG factors and demand greater transparency from companies regarding their ESG performance. In the ESG landscape, “frameworks” provide a broad structure for reporting, focusing on principles and offering flexibility in how information is disclosed. “Standards” are more specific, offering detailed requirements for reporting on particular issues or sectors. “Guidelines” are recommendations or best practices that organizations can follow voluntarily, providing advice without mandatory obligations. Lastly, “protocols” are systematic rules or procedures for reporting, often technical, ensuring consistency and comparability in data collection and presentation. Each serves a unique role in guiding organizations to effectively disclose their sustainability performance and impacts. This chapter synthesizes insights from various standards and frameworks to understand the evolving landscape of ESG practices in business and investment decisions. The chapter includes interviews with two industry experts in the US on how their sectors in metal manufacturing and hospitality utilize sustainability guidelines
Keywords: sustainability, corporate reporting, regulatory frameworks, Paris Agreement, GHG, responsible sourcing, disclosures, SFDR, PAI indicators
Chapter 5 - Analysts examining data KPIs and metrics for their sustainability reporting in various sectors