​The complete, accurate, and transparent disclosure of information by listed companies is a crucial to build investor confidence and attracting their interest. In addition to financial data, information on Environmental, Social, and Governance (ESG) performance is essential, as it significantly influences investment decisions. Businesses today face increasingly complex economic, social, and environmental risks and challenges. ESG reporting helps stakeholders gain a more comprehensive understanding of a company’s operations while reinforcing confidence in the company’s long-term business potential.

For these reasons, ESG reporting has become a crucial aspect for listed companies seeking to demonstrate their commitment to sustainable and responsible business practices. Effective ESG reporting not only enhances transparency but also builds trust with investors, customers, and other stakeholders. This article provides an overview of ESG reporting, its significance, key frameworks, benefits, challenges, and the role of professional services in facilitating robust ESG disclosures.​

 

About ESG Report

Understanding ESG Reporting

ESG reporting involves the disclosure of a company’s activities and performance in three key areas:​

  • Environmental: Covers impact on the planet, including energy consumption, waste management, and carbon emissions.​
  • Social: Focuses on interactions between employees, suppliers, customers, and communities, covering aspects like labor practices and community engagement.​
  • Governance: Relates to internal systems of practices, controls, and procedures, including board diversity, executive compensation, and shareholder rights.​

 

Importance of ESG Reporting

The significance of ESG reporting has grown substantially in recent years. Investors increasingly recognize that ESG factors can influence financial risks and opportunities. Integrating ESG criteria into investment strategies helps identify companies that are likely to be sustainable and successful in the long term. Moreover, companies with strong ESG performance often enjoy benefits such as improved financial results, enhanced competitiveness, better access to capital, and stronger relationships with customers and employees.

 

Key ESG Reporting Frameworks

Several frameworks guide companies in structuring their ESG reports:​

  • Global Reporting Initiative (GRI): Provides comprehensive standards for sustainability reporting, widely adopted globally. (www.globalreporting.org)
  • Sustainability Accounting Standards Board (SASB): Offers industry-specific standards to identify financially material sustainability information. (sasb.ifrs.org)
  • Climate Disclosure Standards Board (CDSB): Focuses on integrating environmental information into mainstream financial reports. ​(www.cdsb.net)

 

Benefits of ESG Reporting

Effective ESG reporting offers numerous advantages:​

  • Investor Attraction: Transparency in ESG practices attracts investors seeking sustainable investment opportunities.​
  • Risk Management: Identifies and mitigates potential environmental and social risks.​
  • Reputation Enhancement: Demonstrates corporate responsibility, enhancing brand image.​
  • Regulatory Compliance: Ensures adherence to evolving regulations and standards.​

 

Challenges in ESG Reporting

Despite its benefits, ESG reporting comes with challenges:​

  • Data Collection: Gathering accurate and comprehensive ESG data can be complex.​
  • Lack of Standardization: Differences in reporting standards can lead to inconsistencies.​
  • Resource Demand: Implementing robust reporting processes requires  time and resources.​

 

The Role of Professional Services in ESG Reporting

Given the complexities of ESG reporting, companies often seek external expertise for support:​

  • Consulting Services: Professionals provide guidance on best practices, framework selection, and strategy development.​
  • Data Management: Assistance in establishing systems for accurate data collection and analysis.​
  • Reporting and Assurance: Support in preparing reports and obtaining third-party assurance to enhance credibility.​

 

Sustainability Reporting in Thailand:

The Stock Exchange of Thailand (SET) has introduced a “Sustainability Reporting Guide for Listed Companies” to promote comprehensive ESG disclosures. This guide aligns with international standards such as the GRI Standards and the Sustainable Development Goals (SDGs). It serves as a valuable resource for companies aiming to enhance their sustainability reporting practices. Components of the Sustainability Reporting Guide for Listed Companies include:,

  • Sustainability Reporting Guidelines. This is based on the principle of material, timely, reliable and c
  • Key Components of Sustainability Reporting:
    • Part 1: Essential Information: which covers 1. Business model; Business value chain; and 3. Stakeholders.
    • Part 2: Sustainability Policy and Strategy: which covers 1. Sustainability Policy and Targets; Material Sustainability Topics; 3. Prioritization of Material Topics; and 4. Material Sustainability Topics for All Industries.
    • Part 3: Sustainability Performance: which covers 1. Objectives and Targets; Management Approach; and 3. Indicators and Performance.
  • Basic ESG Metrics and Explanations: Includes fundamental sustainability performance indicators (ESG Metrics) along with explanations and their alignment with international sustainability reporting frameworks such as the GRI Standards and the Sustainable Development Goals (SDGs). Such indicators cover only topics on the environment, such asE1) Environmental Policy and Compliance Standards; E2) Energy Management; E3) Water Management; E4) Waste Management; and E5) Greenhouse Gas Management. But, also, topics on Social Dimension such as S1) Human Right; S2) Fair Labor Practices; S3) Responsibility to Customer/Consumers; S4) Responsibility to Communities and Societies, and on Governance and Economic Dimension such as G1) Policy, Structure and Governance System; G2) Sustainability Policy and Strategy; G3) Sustainability Risk Management; G4) Sustainable Supply Chain Management; and G5) Innovation Development.
  • Example of an Annual Performance Summary Table: Provides a structured format for presenting comparable year-over-year data, ensuring transparency and clarity in tracking the company’s sustainability progress over time.

 

Global Trends and Regulatory Developments

Globally, regulatory bodies are increasingly mandating ESG disclosures:​

  • Australia: From January 2025, large companies are required to prepare annual sustainability reports containing mandatory climate-related financial disclosures, covering scope one, two, and three emissions. ​
  • European Union: The Corporate Sustainability Reporting Directive (CSRD) requires companies to disclose detailed information on social and environmental issues, aiming to enhance transparency and accountability. ​

 

Conclusion

ESG reporting is no longer optional but a business imperative. Companies that proactively engage in transparent and comprehensive ESG disclosures position themselves favorably in the eyes of investors, regulators, and the public. Leveraging professional services can significantly enhance the quality and effectiveness of ESG reporting, ensuring that companies not only comply with regulations but also contribute positively to sustainable development.​

ESG Metrics and Reporting Guidelines

The SET’s “Sustainability Reporting Guide for Listed Companies” provides detailed ESG metrics tailored to various industry groups. These metrics serve as a tool and checklist for monitoring performance within an organization and facilitating continuous improvement. The guide emphasizes the importance of aligning ESG reporting with international frameworks such as the GRI Standards and the SDGs. Companies are encouraged to utilize this guidance in conjunction with the Sustainability Reporting Guide to prepare comprehensive sustainability reports that meet the current interests and needs of stakeholders.​ The guideline can be obtained at https://setsustainability.com//download/gcv9x7or2u1fnil

 

By adhering to these guidelines and effectively communicating their ESG performance, companies can enhance their competitiveness, attract quality investors, and contribute to the broader goal of sustainable development.