NAEM Outlines Recommendations For Improving ESG Reporting Process

June 8, 2011 — Improving the value and efficiency of environmental, social and governance (ESG) reporting will require more collaboration between companies and researchers, according to NAEM's "Driving ESG Reporting Progress through Dialogue" report.

"In the future, public sustainability disclosure will not be limited to leadership companies," said NAEM Executive Director Carol Singer Neuvelt. "Business leaders need to learn more about the emerging field of ESG research and develop a strategy for responding to the growing number of information requests."

The report summarizes insights from NAEM's May 2011 "Measuring Corporate Sustainability" conference and outlines key recommendations for improving the ESG research process including:

There should be an effort to identify the metrics that are material to a company's sustainability progress. If companies can identify which ESG metrics demonstrate financial benefits, research firms will be able to ask more relevant questions.
Researchers should do a better job reflecting the differences between industries in their evaluation models. Because many rankings do not currently take a company's business model into adequate account, evaluations often reward industries that inherently require fewer resources.

Business leaders and ESG researchers should build relationships to ensure more accurate, efficient and timely reporting. These relationships are also critical for the development of a clearer value proposition for ESG reporting.

Companies should make as much information public as possible through public websites, annual reports, GRI reports and integrated reporting.

Organized as a stakeholder dialogue, the May meeting included representatives from more than 100 companies, research firms, and third-party verifiers, including American Electric Power Co. Inc., 3M, The Coca-Cola Co., General Mills Inc., IW Financial, Jantzi-Sustainalytics, Ernst & Young LLC and Pax World.

Neuvelt said NAEM plans to pursue continued dialogue with the ESG research community through its 'Green Metrics that Matter' project, an endeavor to identify the sustainability metrics that yield the most business value.

The full report is available to view and download at NAEM's website.

About NAEM
NAEM, the Premier Association for environment, health and safety (EHS) management empowers corporate leaders to advance environmental stewardship, create safe and healthy workplaces, and promote global sustainability. As the largest professional community for EHS and sustainability decision-makers, we provide peer-led educational conferences and an active network for sharing solutions to today's corporate EHS and sustainability management challenges.


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