Suyash Kumar Agrawal – 176

Praveen Nyati – 350

Shivam Sharma - 369
Vibhor Sharda - 479
Yash Agrawal – 480
Aryan Osan – 483
Aman Sharma - 490
 What is ESG?

• Environmental: This includes a company's

impact on the environment, such as its carbon
footprint, energy usage, water consumption,
and waste management.
• Social: Social factors encompass a company's
relationships with its employees,
communities, customers, and suppliers. Issues
like diversity and inclusion, labor practices,
human rights, and community engagement fall
under this category.
• Governance: Governance relates to the
systems and processes a company has in place
to ensure ethical conduct, transparent
decision-making, and accountability. Key
governance aspects include board
composition, executive compensation,
shareholder rights, and anti-corruption
measures.

ESG reporting refers to the practice of disclosing a

company's performance in the areas of
Environmental, Social, and Governance (ESG) factors.
These factors are considered by investors,
stakeholders, and the public to assess a company's
impact on society and the environment, as well as its
commitment to ethical business practices.
 Importance of ESG Reporting:
The importance of ESG reporting lies in its capacity to provide a comprehensive and transparent view of a company's sustainability practices and ethical governance.
Risk Management:
• Environmental Risks: ESG reporting helps
companies identify and manage environmental
risks, such as climate change impacts, resource
scarcity, and pollution. Understanding and
addressing these risks can contribute to long-
term business resilience.
• Social Risks: Companies need to be aware of
social risks related to their workforce,
communities, and supply chains. ESG reporting
enables the identification of issues like labor
disputes, human rights violations, etc.
Regulatory Compliance:
• Mandatory Reporting: In some jurisdictions,
regulatory authorities have mandated ESG
reporting for certain companies. Compliance with
these regulations is essential to avoid legal
consequences and fines.
• Global Standards: Adhering to widely recognized
ESG reporting frameworks, such as GRI, SASB, and
TCFD, not only ensures compliance but also
provides a common language for communicating
sustainability efforts globally.
Financial Performance and Value
Creation:
• Long-Term Value: Investors are increasingly recognizing the
correlation between strong ESG performance and long-term
financial success. Companies that prioritize sustainability
and ethical governance are seen as better positioned to
navigate challenges and capitalize on opportunities.
• Access to Capital: Many investors, including institutional
funds and socially responsible investors, are integrating ESG
factors into their decision-making processes. Companies
with robust ESG profiles may find it easier to access capital
and attract investment.
Competitive Advantage:
• Market Differentiation: Companies that proactively address
ESG issues can differentiate themselves in the market.
Consumers are increasingly choosing products and services
from companies with values aligned with their own, giving
sustainable businesses a competitive edge.
• Talent Attraction and Retention: ESG-oriented companies
are often more attractive to employees, especially younger
generations who prioritize working for organizations that
contribute positively to society.
Stakeholder Trust and Reputation:
• Transparency and Trust: ESG reporting fosters
transparency by providing stakeholders with detailed
information about a company's impact on the
environment, society, and its governance practices. This
transparency builds trust among customers,
employees, investors, and the wider community.
• Reputation Management: A positive ESG reputation
can enhance a company's brand value and customer
loyalty. Conversely, negative ESG incidents can result in
reputational damage and loss of trust.
Innovation and Operational Efficiency:
• Innovation Opportunities: A focus on environmental
sustainability can drive innovation by encouraging
companies to develop eco-friendly products, services, and
processes. This not only aligns with consumer preferences
but also opens new market opportunities.
• Operational Efficiency: ESG reporting can highlight
opportunities for operational improvements, resource
efficiency, and cost savings. Companies that optimize their
operations in line with ESG goals can achieve both
environmental and financial benefits.
 Frameworks and Standards - I

Sustainability Accounting Standards Board Task Force on Climate-related

Global Reporting Initiative (GRI):
(SASB): Financial Disclosures (TCFD):

Focus: TCFD was Key Disclosures: It

established by the encourages
Overview: GRI is Industry
Integration with Financial Stability companies to
one of the most Structure: GRI Alignment: SASB
Materiality: GRI Financial Board to improve disclose
widely used and Standards are Overview: SASB standards cover a
emphasizes the Reporting: SASB disclosure of information
recognized ESG divided into three focuses on range of industries
importance of aims to integrate climate-related related to their
reporting categories: industry-specific and provide a set
identifying and ESG reporting into risks and governance
frameworks Economic, disclosure of materiality-
reporting on financial filings, opportunities. It processes for
globally. It Environmental, standards, focused metrics
material issues, making it easier encourages climate-related
provides a and Social. Each tailoring reporting for each sector.
ensuring that for investors to organizations to risks, the
comprehensive set category includes requirements to This helps
organizations focus evaluate a provide integration of
of guidelines for specific disclosures the unique ESG organizations align
on aspects that are company's information on climate
organizations to and performance risks and their reporting
most relevant to financial and how climate- considerations into
report on their indicators. GRI also opportunities with the specific
their business and sustainability related their strategy, and
economic, offers sector- within each sector. sustainability
stakeholders. performance in a considerations the metrics used
environmental, specific guidance. issues relevant to
unified manner. impact their to assess and
and social impacts. their industry.
financial manage these
statements. risks.
 Frameworks and Standards - II

Carbon Disclosure Project Integrated Reporting

ISO 26000: UN Global Compact (UNGC):
(CDP): Framework (IRF):

Holistic Reporting: Seven Core

Scope: CDP is a Six Capitals: The Guidance on
Questionnaires: Aims to provide a Subjects: ISO Principles-Based
global disclosure IRF introduces the Social
CDP issues holistic view of an 26000 covers Approach: The Reporting
system that concept of six Responsibility: ISO
questionnaires to organization's seven core UNGC is a Requirements:
focuses on capitals: financial, 26000 is not a
companies, asking performance by subjects of social voluntary initiative While the UNGC
environmental manufactured, certification
for detailed integrating responsibility: that encourages itself does not
performance, intellectual, standard but
information on financial and non- organizational businesses to prescribe specific
including climate human, social and provides guidance
their financial governance, adopt sustainable reporting
change, water relationship, and on social
environmental information. It human rights, and socially standards, it
security, and natural capital. responsibility. It
initiatives, risks, encourages labor practices, responsible encourages
deforestation. It is This framework outlines principles
and opportunities. companies to the environment, policies. It is based participants to
widely used by helps and practices that
The data collected articulate how fair operating on ten principles communicate on
companies to organizations organizations can
is used to produce their strategy, practices, covering human their progress in
voluntarily assess and adopt to operate
scores and governance, consumer issues, rights, labor, implementing the
disclose their communicate their in a socially
rankings that are performance, and and community environment, and ten principles.
environmental impact on various responsible
made public. prospects create involvement and anti-corruption.
impact. forms of capital. manner.
value over time. development.
 Important Characteristics Investors Look for in ESG Reporting Investors Positive about ESG Reporting

Integrated Decision-Making: Investors now integrate ESG

factors, recognizing their role in long-term value creation. This
shift reflects a strategic approach to resilient and sustainable
investments.
Transparency and Accountability: Investors emphasize
comprehensive ESG disclosures, valuing transparency for
nuanced performance assessments. This trend underscores
the importance of accountability and effective risk
management.
Stakeholder Alignment: Investors align with stakeholder
values, favoring companies committed to social responsibility,
environmental stewardship, and ethical governance. This
reflects a growing demand for sustainable business practices.
Sustainable Focus: Investors prioritize companies with robust
ESG practices, acknowledging sustainability as crucial for
consistent, long-term returns. This shift highlights a strategic
focus on sustainable investments.
Regulation and Standards Impact: Adherence to ESG reporting
standards is favored by investors, indicating a positive
response to regulatory influence. This trend reinforces the
commitment to responsible and transparent business
practices.

Report by PwC, 2021

Challenges with ESG Reporting

Disclosure of Negative
Quantification of Social
Lack of Regulatory Limited Stakeholder Information:
Greenwashing and Governance
Standardization: The Fragmentation: Diverse Engagement: Companies may be
Concerns: Some Factors: Unlike
absence of regulatory Inadequate hesitant to disclose
companies may engage environmental metrics,
standardized metrics requirements across engagement with negative ESG
in "greenwashing," quantifying social and
and reporting jurisdictions can create stakeholders during the information, fearing
where they overstate governance factors can
frameworks poses a complexity. Companies reporting process can reputational damage.
their ESG efforts be subjective.
challenge. Different operating globally may lead to oversight of This lack of
without meaningful Measuring aspects such
industries and regions struggle to comply with critical issues and miss transparency can
actions. This can as employee
may use varied varying ESG reporting opportunities for hinder the accurate
mislead stakeholders satisfaction, diversity,
approaches, making standards, adding a meaningful assessment of a
and erode trust in ESG and governance
comparisons and layer of regulatory collaboration and company's overall
reporting. practices requires
benchmarking difficult. uncertainty. feedback. sustainability
nuanced approaches.
performance.

Short-Term vs. Long-

Complexity in Metrics: Resource Limited Assurance
Data Quality and Term Focus: Balancing Dynamic Nature of ESG
Determining Intensiveness: ESG Standards: The absence
Consistency: Ensuring short-term financial Risks: ESG risks are
appropriate and reporting can be of universally accepted
the accuracy, reliability, expectations with long- dynamic, evolving over
relevant ESG metrics for resource-intensive, assurance standards for
and consistency of ESG term ESG goals can be time. Keeping up with
each industry and requiring significant ESG reporting can
data can be challenging. Investors emerging risks, such as
company can be time, expertise, and impact the credibility of
challenging. Incomplete often demand those related to climate
complex. Balancing the financial investments. disclosures. Investors
or unreliable immediate financial change or social justice,
need for Smaller companies may may question the
information may hinder returns, potentially poses challenges in
comprehensive face challenges in reliability of reported
the effectiveness of undermining the proactive risk
reporting with allocating resources for information without
reporting and decision- commitment to long- management and
practicality poses a comprehensive standardized assurance
making. term sustainable reporting.
challenge. reporting. processes.
practices.
 ESG Reporting as Part of Company’s Core Strategy
Monitoring:
Ongoing monitoring of ESG performance is crucial.
Regular assessments and reviews ensure that the
company stays on course with its ESG objectives,
allowing for adjustments and improvements in
response to changing circumstances and
stakeholder expectations.
Metrics and Goals:
Defining clear ESG metrics and goals is
essential for tracking progress and
demonstrating commitment.
Companies should establish measurable
targets aligned with their core strategy
to assess the impact of ESG initiatives.
Innovative Programs and Policies:
Companies need to develop innovative ESG
programs and policies that go beyond
compliance. Integrating sustainability into
the core strategy involves creating
initiatives that drive positive environmental
and social impact while fostering
innovation.
Emphasis on Material Issues:
Embedding ESG into the core strategy involves
identifying and prioritizing material ESG issues
that significantly impact the company and its
stakeholders. This ensures a targeted and
effective approach.
Strategic Alignment:
Integrating ESG into the core strategy requires
aligning sustainability goals with overall
business objectives. This strategic alignment
ensures that ESG initiatives contribute directly
to the company's success and long-term value
creation.
Board Leadership and Oversight:
Establishing ESG as a core strategy
necessitates strong leadership from the board.
Boards should provide oversight, set the tone
for ESG integration, and ensure alignment
with the company's broader strategic vision.
Thank You.