8.4 Recommendations for Internationally Oriented Sustainability Reporting

In recent years, ESG has become a key issue in the investor community. The following tips can help to develop an effective and targeted system for sustainability reporting:

• Avoid greenwashing/SDG-washing with transparent, balanced, and credible reporting.

• Perform robust climate scenario analyses and quantify the financial impact (TCFD reporting). The same logic can also be applied to other ESG risks. 

• Demonstrate the role of the company’s decarbonization strategy in achieving net-zero targets (ideally aligned with Science Based Targets).

• Do not just focus on environmental sustainability; also consider social factors.

• Conduct a robust materiality analysis that helps external stakeholders to focus on the right areas. From an investor-relations perspective, the focus in this regard should also be on financially significant ESG factors (risks and opportunities for the company)

• ESG should be integrated into the company’s presentation of relevant facts (“equity story”) and its long-term value creation strategy. ESG should therefore be integrated into the company’s strategy and the entire value chain.

• Involve the CFO and finance functions in sustainability reporting. This helps to link and reconcile non-financial information with financial data, and also improves other processes and quality by building upon tried-and-tested financial reporting processes.

• Obtain external assurance for the sustainability reporting. This helps to bring it up to the same level as financial reporting and to boost its credibility.

Last but not least, the company should communicate with its shareholders and key investors to understand their expectations in relation to sustainability – after all, they may have differing views and priorities.