ESG reporting is mainly a box ticking exercise, say half of employees

Half of employees see ESG reporting as a box-ticking exercise according to a new poll from EcoOnline. The firm’s ESG (Environmental, Social, and Governance) survey was conducted in June 2022 and included 124 businesses and their employees. The study found a significant minority of businesses polled are not actively reporting on ESG measures and performance, with 42 percent of survey participants disclosing that their organisation currently has no reporting system in place.

ESG reporting is the publication of data for the purposes of documenting an organisation’s activities, and strengthening investor and customer transparency. It typically encompasses qualitative disclosures of relevant and pressing topics surrounding the three pillars of environmental, social and governance practices, and quantitative metrics used to measure performance and effectiveness of strategies.

The authors claim that the study highlights a majority of employees felt organisational pressure to report ESG data had increased in the last three years, with environmental activity flagged as the highest priority (67 percent). However, despite these expectations for greater transparency, two thirds of employees responding to the survey (66.7 percent) claimed their organisation does not produce a publicly available annual ESG or sustainability report. This suggests a concerning lack of clarity surrounding the execution and effectiveness of ESG strategies amongst those businesses surveyed.

With the majority of respondents believing pressure to report on environmental (80 percent), social (76 percent) and governance (73 percent) will increase over the next year, those who don’t make the investment now are putting themselves at financial and regulatory risk.

The poll research found that 69 percent of employees believed that where strong ESG measurement and reporting was in place, it had a positive impact on their organisation’s performance.

A third of survey participants (30 percent) named stakeholders and investors as a significant source of pressure on their organisation to report on sustainability and ESG measures. However, the study also revealed that the biggest source of pressure came from customers, with 31.5 percent agreeing that customers play a vital role in holding companies to account over the climate crisis.