Our Outside Voice series highlights the perspectives of stakeholders and leaders on important sustainability topics, such as sustainability reporting. On the particulars, we may not always agree. But we believe in hearing and learning from others who offer valuable insights and a different point of view on issues that are important to us all.
Mike Wallace, a partner at BrownFlynn, an ERM Group company, is an internationally recognized expert in sustainability with more than 20 years of experience advising corporations, nonprofits and government agencies on sustainability programs. He’s also interim executive director of the Social and Human Capital Coalition, a global collaboration that helps companies recognize, measure and value the importance of people and communities. Previously, he was a director at the Global Reporting Initiative (GRI).
Wallace recently spoke with our Outside Voice team about the evolution of sustainability reporting, new areas of interest for stakeholders and the benefits of transparency to both publicly traded and privately owned companies.
Who is the audience for corporate sustainability reporting, and why does such reporting matter?
I’ve watched this field evolve over two decades, and we’ve entered a unique moment when all of the major players in the financial industry — stock exchanges, ratings agencies, investors, pension funds and managers, insurers and lenders — are showing significant interest in ESG [environmental, social, governance] and sustainability reporting. The audience also includes a company’s institutional customers, employees and — to some degree — consumers.
We can stop calling sustainability reporting a trend. It’s here to stay.
Financial stakeholders realize there are risks and opportunities associated with how and whether companies manage their ESG performance. For the financial markets to make informed decisions, they need ESG information, which can be packaged as discrete disclosures or a comprehensive sustainability report. Financial market players also seek to compare companies on ESG performance, so there is a need for consistency in how things are measured and disclosed. It’s this continual demand for comparable, standardized and consistent ESG information that has driven the evolution of sustainability reporting frameworks, guidelines and standards over the past 20-plus years.
The continuous improvement within the sustainability reporting field has brought us to this point. It may feel confusing and overwhelming for companies to look at the ESG reporting landscape, but at the end of the day, most of today’s disclosure guidelines build off GRI’s approach. It is the longest-running and most widely used sustainability reporting method in the world.
The Task Force on Climate-Related Financial Disclosures (TCFD) is one of the latest moves in the ESG disclosure space. It’s very specifically focused on climate, but we have never before seen such a diverse collection of companies come together to discuss and endorse the need to assess the climate risks to ALL business. A look through the supporters of the TCFD will reveal stock exchanges, insurers, lenders, investors, rating agencies and the companies that need all these financial services.
more at: https://newsroom.domtar.com/mike-wallace-sustainability-reporting/