From the perspective of an investor, a business, or even an individual concerned about environmental and social protection, understanding and implementing ESG (Environmental, Social, and Governance) reporting is not merely a task but a profound commitment to sustainable development. On the path towards a sustainable future, reflecting a company's efforts through ESG indicators has become an indispensable part. Yet, truly comprehending what ESG reporting entails and how we can effectively carry it out remains a question. Let's delve into ESG reporting and its implementation in this blog together!
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What is ESG report ?
ESG Report refers to a summary report of a business's activities related to environmental, social, and governance factors. This report provides information to stakeholders about how the business impacts the environment, society, and the economy.
ESG (Environmental, Social, and Governance) reporting is becoming increasingly important for businesses of all sizes. It's not just about compliance; it's also a tool for attracting investors, customers, and employees, while building brand reputation and managing risks effectively.
Why is ESG reporting important?
"94% of Vietnamese businesses surveyed recognize the importance of sustainable development, and 51% have officially implemented ESG practices (according to the 2023 Business Outlook Report by UOB)."
There are several reasons why ESG reporting is crucial for businesses:
- Attracting investors: Investors are increasingly interested in ESG factors when making investment decisions. They value companies committed to sustainable development and good corporate governance.
- Enhancing brand credibility: ESG reporting helps businesses demonstrate transparency and accountability, thereby enhancing brand credibility in the eyes of customers and partners.
- Attracting and retaining talent: Employees, especially the younger generation, are increasingly concerned about working for companies that are environmentally and socially responsible. ESG reporting is a way for businesses to demonstrate their commitment to these values.
- Risk management: ESG reporting helps businesses identify and manage risks related to the environment, society, and governance. This can help companies avoid future costs and losses.
- Competitive advantage: ESG reporting can help businesses gain a competitive edge over competitors who do not report on these factors.
Whether a business aims to expand internationally or simply wants to mature, understanding and implementing ESG reporting is not only a good choice but also a necessary step to ensure the sustainable existence and development of every enterprise.
Additionally, ESG reporting is extremely important for businesses in the European Union for various reasons. Among them, the Sustainable Finance Disclosure Regulation, effective since March 2021, imposes reporting requirements with a focus on sustainability-related initiatives. This regulation is supplemented by the Corporate Sustainability Reporting Directive, effective since January 2023. Large organizations in the United Kingdom must report using the SECR framework (Energy and Carbon Reporting).
Read more: ESG becomes more important than ever after the impact of the COVID-19 pandemic
What does ESG reporting include?
ESG reporting typically includes the following information:
- Environmental: Energy consumption, greenhouse gas emissions, waste generation, natural resource usage, etc.
- Social: Occupational safety, working conditions, labor rights, diversity and inclusion, social responsibility to the community, etc.
- Governance: Corporate governance structure, business ethics, risk management, transparency of information, etc.
Sample ESG reports from some large corporations
1/ 4P’s 2023 ESG Report
- To view the report in VIETNAMESE: SustainabilityReportVIE23
- To view the report in ENGLISH: SustainabilityReportENG23
2/ FPT’s 2023 ESG Report
- Reading report at: bao-cao-esg-fpt-2023
3/ AES Mong Duong 2023 ESG Report
- Reading report at: bao-cao-phat-trien-ben-vung-2020-2022.pdf
4/ Carlsberg 2023 ESG Report
- Reading report at: carlsberg-group-2023-esg-report
5/ Vinamilk 2023 ESG Report
- Reading report at: bao-cao-phat-trien-ben-vung-2023
6/ Vicostone 2023 ESG Report
- Reading report at: bao-cao-phat-trien-ben-vung-2022
Approaches to Conducting ESG Reporting
Currently, there are various methods available for conducting ESG reporting. Businesses can either prepare the reports themselves or enlist the support of professional consulting firms.
You can track the ESG reporting guidelines here:
Step 1: Step 1: Identify ESG objectives for your company
Before setting goals, you need to understand how your business operates. This means conducting thorough baseline assessments to determine your current performance against key ESG criteria. You can use the results of these assessments to monitor progress towards your sustainable goals.
Step 2: Use the SMART framework to set goals
Using SMART criteria will help you establish achievable ESG goals within a predetermined timeframe.
- Specific: What needs to be done? What steps need to be taken to achieve this goal? Clearly identify what you will do and how you will do it.
- Measurable: How will you track your progress? How will you know you are succeeding? Incorporate measurable and trackable data.
- Achievable: As a reality check for your business. Ensure that your goals are attainable. How will you accomplish the goals?
- Realistic: Are the goals aligned with your overall business objectives? Goals will be difficult to achieve if they lack realism.
- Timely: Establish a timeframe with an end date when you achieve your goals. Make sure your team agrees on the timing to achieve the goals. Incorporate time-bound parameters into your ESG strategy.
Step 3: Collect quantitative and qualitative data to monitor progress
You need to use the right platform to track internal ESG data and measure your organization's progress. ESG data will also provide supporting evidence for your brand ambitions while helping you set intermediate goals to maintain high development momentum.
Step 4: Identify key performance indicators (KPIs) for each ESG goal
For each ESG goal, you will need to compare multiple metrics. For example, let's revisit our ESG goal of "reducing scope 1, 2, and 3 emissions by 30% absolute basis by 2030." To track progress towards this goal, you will need data on carbon emissions, the percentage change in carbon emission intensity as a percentage of revenue, and the percentage change in fuel efficiency. These measured metrics are called Key Performance Indicators (KPIs). Each ESG goal will be associated with specific KPI metrics.
Next, integrate quantitative KPI metrics with qualitative measurements as short-term and predefined goals, for example: "transition to renewable energy suppliers." Ensure feedback on your ESG goals, KPI index measures, and your qualitative goals. This will give your team - and external stakeholders - awareness of ownership and commitment to your ESG goals.
Step 5: Share and disclose your ESG goals
Publicize your ESG goals and where you are in achieving these goals. Transparency will enhance accountability and credibility, meaning customers can see where you are on your journey.
- Share how and why your company chose specific ESG goals that your business is aiming for.
- Disclose the KPI measures you are using to assess progress towards your ESG goals.
- Identify which processes are in place to monitor and measure progress towards your ESG goals.
Clarify the mission and vision of the brand in line with your ESG goals. This will communicate to stakeholders what your brand stands for.
Some notes when preparing ESG reports:
- Must be carried out honestly and accurately.
- Should be updated regularly to reflect the actual situation of the business.
- Should be presented clearly, succinctly, and comprehensibly.
AES Mong Duong thermal power plant develops sustainably
As the world's largest energy corporation listed in the Fortune 500, AES (NYSE: AES) continuously drives the future of the energy industry. AES Mong Duong Vietnam, a subsidiary of AES Corporation, has successfully developed the BOT (Build-Operate-Transfer) Thermal Power Project Mong Duong 2 with a capacity of 1,242 MW and a total investment of $2.1 billion USD. This is one of the first and largest BOT projects in Vietnam, contributing nearly 2.3% of the installed capacity to the national power system.
AES Mong Duong with a strong commitment to transparently disclosing environmental information, aiming for sustainable development follow passage translated to English: "According to ESG standards (Environmental, Social, and Governance), the company has been publishing regular Sustainability Reports since its establishment, transparently sharing commitments to operating the Mong Duong 2 Plant safely and efficiently while promoting the responsible development and transition of the energy sector.
iLotusLand is proud to be a partner of AES Mong Duong in implementing advanced environmental monitoring solutions. The system includes the Datalogger Envidata 1801 and iLotusLand Platform: iLotusLand for Environment and iLotusLand LED & Link Public, which centralizes data from all monitoring stations, providing capabilities for:
- Real-time data monitoring
- Data analysis
- Control Remotely
- Effectively and transparently publicizing environmental monitoring data
As a result, AES Mong Duong can:
- Enhance plant operational efficiency
- Ensure compliance with environmental standards
- Enhance transparency in operations
The iLotusLand software helps businesses manage and monitor environmental monitoring in real-time efficiently. With over 9 years of experience, leading the Vietnamese market in environmental data management and monitoring through IoT technology.
Contact now for advice on technological solutions for the sustainable development of your business.
Conclusion
In today's context, conducting ESG reporting is not only a complex task but also a deep commitment to the sustainable development of every organization. For investors, ESG reporting is a way to assess the sustainability and social responsibility of a business before making investment decisions. For businesses, ESG reporting not only helps them build their brand but also creates favorable conditions to attract talent and enhance risk management. Even for individuals, caring about and monitoring ESG reporting is a way to contribute to environmental and social protection by supporting businesses committed to these values.
ESG reporting is not just about publishing data and information; it is also a process of genuine and transparent reflection on each organization's activities. By conducting ESG reporting sincerely and accurately, every business builds credibility and trust from stakeholders and contributes to the sustainable development of the community and society.
Therefore, understanding and implementing ESG reporting are not just trends but also responsibilities of every organization and individual concerned about environmental and social protection. It is a way for us to collectively move towards a sustainable and prosperous future for everyone.
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For environmental monitoring solutions, contact iLotusLand:
𝗘𝗺𝗮𝗶𝗹: [email protected]
𝗛𝗼𝘁𝗹𝗶𝗻𝗲: +84 909 403 778
𝗪𝗲𝗯𝘀𝗶𝘁𝗲: www.ilotusland.com
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