How to Maneuver the ESG Standards and Ratings Quagmire

With no universal framework for ESG reporting, find out how companies can proactively manage and disclose key information.

If companies don’t proactively manage and disclose key information along with financials, they can face reputational, investment and other consequences. (Source: Prostock-studio/Shutterstock.com)

When the subject of ESG reporting comes up, you’re likely to encounter some head scratching or even downright confusion. ESG reporting has entered the mainstream over the past several years, but even companies that want to participate have questions.

For now, public companies aren’t required to provide ESG reports along with their financials, but it’s only a matter of time before SEC-registered companies will need to comply with some level of reporting or disclosure requirements related to their sustainability practices. While the impact will be felt first by public companies, private funds and private companies will likely follow. ESG disclosures and underlying data will be under a microscope, and complete and accurate data will be critical and essential.

But it is not always easy to understand what businesses are being asked to do and report. What do shareholders, institutional investors and customers expect? And how are the most successful companies responding?

To answer these questions, it’s helpful to understand the ESG landscape as it is now and what to expect over the next few years.

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