DFIN's (Donnelley) new whitepaper: "ESG Risks and Opportunities: Understanding the ESG Landscape" suggests a 4-step framework for companies to measure, manage, and communicate their ESG story in a way that facilitates investors' risk- & long-term sustainability-based decision-making.
The paper outlines these four steps:
- Navigating ESG issues: Performing an ESG materiality assessment
- Building a map: Identifying available information and internal subject owners for developing decision-useful disclosures
- Following the ESG disclosure path: Using company-specific KPIs to articulate ESG strategy
- Reaching ESG goals: Effectively communicating the company's ESG risks and long-term business strategy
The credit rating agencies, ESG raters, and sustainability and ERM frameworks - such as SASB and COSO - are characterized as tools that can assist companies' identification and development of investor decision-useful disclosures.
As to ESG ratings specifically, the paper includes a checklist and 7-step action plan to manage the ESG ratings conundrum in a way that aims to promote the overarching objective of supplying investors with decision-useful information.
See also Donnelley's "The Future of ESG and Sustainability Reporting: What Issuers Need to Know Right Now" (reported on here), and additional information & resources on our Sustainability/ESG page. This post first appeared in the weekly Society Alert!