ESG Reporting and Communication

ESG Reporting and Communication

• ESG reporting is crucial for investors and companies
• It improves operational efficiency and reduces risks
• ESG factors include issues like climate change, water management, health and safety, supply chains, worker treatment, and corporate culture
• ESG criteria assess an organization's resilience, adaptability, long-term sustainability, and growth potential
• ESG criteria are categorized into Environmental, Social, and Governance factors

Examples of ESG Criteria

• Environmental: Environmental management, GHG emissions, energy management, water and wastewater management, waste and hazardous materials management, ecological impacts and biodiversity
• Social: Workforce training, workplace safety and employee wellbeing, diversity and inclusion, human rights and community relations, customer privacy and data security, product quality and safety
• Corporate Governance: Independence of board and board committees, internal controls and audits, executive compensation, shareholders' rights, business ethics

Identifying Themes and Defining Material Issues

• Effective ESG reports link short-term and long-term value creation
• Companies can use international resources like the UN Global Compact, SDGs, SASB, and GRI for ESG theme development

Identifying and Engaging Stakeholders

• Understanding stakeholder needs is crucial for an effective ESG report
• Stakeholders include customers, employees, suppliers, shareholders, affected communities, and surrounding ecosystems
• Identifying key stakeholders helps define material issues

Aligning Report with Corporate Strategy and Bahrain Vision 2030

• ESG reporting enhances understanding of strategic goals, business models, risks, opportunities, operational indicators, and financial performance
• Identifying gaps in performance enables companies to align with their corporate strategy and Bahrain Vision 2030

Referring to Regional and International Sector-Specific Standards

• Adopting international sector-specific standards (like ISO standards) enhances company accountability and credibility

Evaluating Relevant Performance Indicators

• Disclosing specific performance indicators demonstrates progress towards sustainability goals
• Indicators are often adopted from agencies like GRI, SASB, and CDSB

Reporting Process (Collecting Quantitative Data, Studying Trends, and Setting Targets)

• Quantitative data is vital for measuring environmental, social, and governance performance
• This facilitates transparency, accountability, and improved investor decision-making.
• Data collection involves various methods like document reviews, probability sampling, observations, interviews, and surveys.

Annual Reports

• Annual reports provide shareholders and stakeholders with information about the company's activities, financial performance, and ESG performance.
• Some companies integrate ESG issues into their annual reports

Stand-Alone Sustainability or ESG Reports

• Stand-alone reports offer snapshots of sustainability initiatives, performance, and impact.
• These reports detail efforts related to environmental challenges, social responsibility, and governance standards.
• They use quantitative data, qualitative insights, and narratives to communicate progress and engage stakeholders.

Reporting on ESG Key Performance Indicators (KPIs)

• KPIs are crucial for evaluating ESG performance.
• They are developed according to the Bahrain Bourse ESG Reporting Guide

Specific ESG Metrics and KPIs (Example, Environmental)

• Specific metrics exist for GHG emissions, emissions intensity, energy usage, and energy intensity.
• Various calculation methods exist, using factors like scope 1,2, and 3.

Specific ESG Metrics and KPIs (Examples, Social)

• Metrics like CEO pay ratio, gender pay ratio, employee turnover, diversity, temporary workers, and discrimination are examples.
• Calculations vary by metric; for instance, compensation to median FTE is an example of calculation for CEO's pay ratio.

Specific ESG Metrics and KPIs (Examples, Governance)

• Metrics and KPIs exist for board independence, incentivized executive pay, collective bargaining, supplier code of conduct, ethics and anti-corruption, data privacy, and sustainability reporting.

Student Tasks

• Students are to study the Alba ESG report to understand their ESG reporting process
• Students are to research and study GRI standards that relate to ESG KPIs