January 2024. Environmental, Social, and Governance (ESG) is a framework that helps investors evaluate how a company manages risk and opportunities around sustainability issues. ESG takes a comprehensive view that extends beyond the environmental aspect to include the social and corporate governance aspects. ESG metrics are non-financial indicators that evaluate companies' ESG performance. They are quantitative, such as GHG emissions; and qualitative, such as Diversity, Equity, and Inclusion (DEI). ESG reporting is the public disclosure of ESG data. Its purpose is to shed light on a company’s ESG activities and improve transparency with investors. ESG reporting offers many advantages to a business, including improved reputation, being more attractive to investors, competitive advantage, improved performance, resilient and sustainable business, capacity building, and climate change mitigation. However, ESG reporting faces challenges such as the lack of a universal standard, being complex requiring specialized expertise, risk of greenwashing, and constantly changing regulations. An ESG framework is a structured approach to ESG reporting. Using an ESG framework produces measurable, actionable, and credible results. ESG standards translate ESG framework principles into action by specifying factors such as metrics, methodologies, and reporting formats. The absence of a universal ESG reporting standard has resulted in reliance on various standards. The most commonly used ESG reporting standards include Task Force on Climate related Financial Disclosures (TCFD) and United Nations Global Compact (UNGC). ESG compliance refers to meeting or exceeding ESG guidelines established by the compliance frameworks and regulatory bodies. An ESG rating, also called an ESG score, provides a benchmark for investors to evaluate a company’s ESG performance and compare it to other companies. Policy wise, the Sustainable Stock Exchanges (SSE) initiative was launched in 2009 to improve corporate transparency and performance on ESG issues. The SSE is coordinated by United Nations Global Compact (UNGC), UN Conference on Trade and Development (UNCTAD), and UN Department of Economic and Social Affairs (UNDESA). In this slideshow, you will learn about the definition, advantages, challenges, implementation steps, UN policy, and global statistics of ESG reporting. For more slideshows on environmental sustainability, please visit s2adesign.com

1. ESG
INTRO & BASICS
Dr. Salem Baidas

2. ENVIRONMENTAL SUSTAINABILITY SLIDESHOWS FROM
S2ADESIGN.COM
S2ADESIGN.COM

3. AGENDA
DEFINITION
01
ASPECTS
02
CHALLENGES
03
UN POLICY
04
INFOGRAPHICS
05

5. Esg basics
Environmental, Social and Governance (ESG)
is a Framework that Helps Investors Evaluate
how a Company Manages Risk & Opportunity
Around Sustainability Issues.

6. Esg metrics
Non-Financial Indicators that Evaluate
Companies' ESG Performance. They are
Quantitative, such as GHG Emissions;
and Qualitative, such as Diversity.

7. The Public Disclosure of ESG Data. Its Purpose is to Shed Light on a
Company’s ESG Activities and Improve Transparency with Investors.
Esg reporting
A Structured Approach to ESG Reporting. Using a Framework
Produces Measurable, Actionable, and Credible Results.
Esg framework
They Translate ESG Framework Principles into Action by Specifying
Factors such as Metrics, Methodologies, and Reporting Formats.
Esg standards
Meeting or Exceeding ESG Guidelines Established by Compliance
Frameworks and Regulatory Bodies.
Esg compliance
Also Called an ESG Score, Provides a Benchmark for Investors to
Evaluate a Company’s ESG Performance and Compare it to Others.
Esg rating
AZEUSCONVENE.COM
Definitions
Esg reporting

8. ENVIRONMENT SOCIAL GOVERNANCE
ASPECTS
Esg reporting

9. LAW.HARVARD.EDU
 Energy Efficiency.
 Deforestation and Biodiversity.
 GHG Emissions and Carbon
Footprint.
 Climate Change and Pollution
Mitigation.
 Resource Consumption and
Waste Management.
EnvironmentalASPECT
Esg reporting

10.  Diversity, Equity, and Inclusion
(DEI).
 Labor Standards and Ethical
Treatment.
 Wages and Benefits.
 Human Rights.
 Community Relations.
 Health and Safety.
LAW.HARVARD.EDU
Social ASPECT
Esg reporting

11.  Corporate Board Structure and
Diversity.
 Sustainability Oversight and
Compliance.
 Political Contributions and
Lobbying.
 Bribery and Corruption.
 Philanthropy.
LAW.HARVARD.EDU
Corporate governanceASPECT
Esg reporting

12. government INVESTORS CUSTOMERS
EMPLOYEES SUPPLIERS REGULATORS
LENDERS insurers COMMUNITIES
FORBES.COM
stakeholders
Esg reporting

13. improved
reputation
resilient &
SUSTAINABLE
Attractive
toinvestors
IMPROVED
PERFORMANCE
COMPETITIVE
ADVANTAGE
Capacity building
IBANET.ORG
advantages
Esg reporting

14. NOT MANDATORY
Regulations
CONSTANTLY changing
GREENWASHING
EXPENSIVE
NOUniform
standard
COMPLEX requiring
specialized EXPERTISE
IBANET.ORG
Challenges
Esg reporting

15. Develop a Clear Strategy In-Line with Objectives. It Should be Based
on a Thorough Understanding of the Company’s Stakeholders.
strategy
Establish Metrics Relevant to the Industry. Metrics Should Be
Measurable, Reliable, and Comparable to Other Companies.
metrics
Regularly Collect and Analyze Data to Track Performance Against
Metrics, Ensuring Accuracy and Reliability.
data
Engage with Stakeholders on ESG Issues to Understand Their
Expectations and Concerns and Build Trust and Loyalty.
Engagement
Integrate ESG Practices into Operations to Ensure that Compliance
is Prioritized Across All Aspects.
integration
IBANET.ORG
Implementation steps
Esg reporting

17. Task force
A 31-Member Task Force Set up by
the Financial Stability Board in 2015.
It Released 11 Recommendations
Regarding the Info that Companies
Should Disclose and Report About
Climate Change Risks.
FSB-TCFD.ORG
Task Force on Climate Related
Financial Disclosures

18. PRINCIPLES
Launched in 2000, the UN Global
Compact is a Corporate Sustainability
Initiative Aimed at Aligning Business
Strategies with 10 Principles on the
Environment, Anti-Corruption, Human
Rights, and Labor Practices.
UNGLOBALCOMPACT.ORG
United Nations Global Compact
ESG Corporate Initiative

20. initiative
Launched in 2009, the Sustainable
Stock Exchanges (SSE) Initiative, is a
Platform Aimed at Enhancing Corporate
Transparency and Performance on ESG
Issues. The SSE is Coordinated by UN
Global Compact, UNCTAD, and UNDESA.
SSEINITIATIVE.ORG
Dept. of Economic & Social Affairs
Sustainable Stock Exchanges

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9.7
6.6
4.1
3.6

22. 94
92
90
88
81
UK
South Africa
Japan
Spain
France
ASSETS.KPMG.COM
by country(percent) 2022
ENVIRONMENTAL RISK REPORTING WORLDWIDE

23. 95
92
81
80
77
UK
South Africa
France
Japan
Sweden
by country(percent) 2022
social RISK REPORTING WORLDWIDE
ASSETS.KPMG.COM

24. 95
91
87
84
76
UK
South Africa
Japan
Thailand
Sweden
by country(percent) 2022
governance RISK REPORTING WORLDWIDE
ASSETS.KPMG.COM

25. 95%
Of UK Companies
Reporting on Social
Risks within the ESG
Framework.
95%
Of UK Companies
Reporting on
Governance Risks
within the ESG
Framework.
94%
Of UK Companies
Reporting on
Environmental Risks
within the ESG
Framework.
ASSETS.KPMG.COM
ESG RISK REPORTING WORLDWIDE IN 2022
Key highlights

26. Share
FACTOR
63%
Governance
61%
Climate risk
41%
Diversity, equity, and inclusion
41%
Human rights practices
39%
Environmental performances
EY.COM
(share)2022
ESG investmentfactors worldwide

27. Env impact
THIS IS A
Social impact
THIS IS A
Higher revenue
52% 43% 36%
(percent)2022
ESG investmentGOALS worldwide
SCHRODERS.COM

28. Share
Fund type
56%
Sustainablefunds thatfocus on financial returns
48%
Funds with sustainabilitybenefitse.g. social benefits
39%
A fund that explicitly impacts people orthe planet
21%
A fund that contributesa solution to a specific issue
SCHRODERS.COM
By Fund Type (Percent) 2022
MOST POPULAR ESG INVESTMENTS WORLDWIDE

29. 21
15
14
14
12
9
8
5
Quality Education
No Poverty
Zero Hunger
Clean Water
Good Health
Equality Increase
Climate Action
Gender Equality
SCHRODERS.COM
(percent)2022
ESG investmentEXPECTED outcomes worldwide

30. S2ADesign.com