ESG Reporting: What Financial Teams Need to Know

Environmental, Social, and Governance (ESG) reporting has moved from buzzword to boardroom priority. Financial teams are increasingly being asked to lead ESG reporting and integrate it into investor materials. Here's what you need to know.

1. Know the Frameworks

Familiarize yourself with the major ESG standards: TCFD, SASB, GRI, and the ISSB's new global baseline. Understand which ones your investors care about — and where your peers are disclosing.

TCFD (Task Force on Climate-related Financial Disclosures): Framework focused specifically on climate-related risks and opportunities; structures disclosures around governance, strategy, risk management, and metrics/targets.

SASB (Sustainability Accounting Standards Board): Industry-specific standards identifying financially material sustainability topics; focuses on ESG issues most likely to impact financial performance.

GRI (Global Reporting Initiative): Oldest and most widely used sustainability reporting framework; takes a multi-stakeholder approach and emphasizes comprehensive reporting on all material impacts.

ISSB (International Sustainability Standards Board): Newest global baseline for sustainability disclosure standards; aims to consolidate existing frameworks with focus on enterprise value.

2. Align ESG to Financial Strategy

ESG isn't just a compliance exercise. It's a lens on long-term value creation. Show how sustainability initiatives affect margins, risk management, or capital allocation. Make ESG a bridge to your equity story.

3. Get the Data Right

Use software to collect and validate ESG metrics, from emissions and DEI stats to board diversity and supply chain audits. Spreadsheets won't cut it anymore — tools like Workiva or Novisto can help automate this process.

4. Make It Investor-Friendly

Investors don't want 200-page PDFs. Summarize ESG highlights in your investor deck, earnings calls, and IR website. Show year-over-year progress, and be honest about areas for improvement.

5. Don't Go It Alone

Work with legal, HR, operations, and sustainability leaders to build a complete picture. Your job is to translate those insights into investor language — and make sure it aligns with financial disclosures.

ESG reporting is a team sport. Get ahead of it now, and you'll be in a stronger position when the SEC, your board, or your investors come calling.