ESG and sustainability
Environmental, social and governance (ESG) risks and opportunities have moved to the top of the agenda for many organizations. EY teams can help organizations address sustainability issues, investor concerns, support ESG reporting and disclosures, and improve ESG performance.
What EY teams can do for you
Investors, regulators and stakeholders across society are increasingly demanding greater transparency from organizations on ESG and sustainability performance to help assess long-term value. To meet stakeholder demands, organizations should broaden the scope of their reporting and seek new ways of communicating strategic performance with both nonfinancial and financial metrics.
Organizations are increasingly prioritizing their ESG and sustainability responsibilities. They appreciate that paying attention to the longer term, stakeholder perceptions, and the social and environmental consequences of their operations can be good for business as well as the planet.
To provide trust and confidence in ESG and sustainability responsibilities to the market and create long-term value, organizations should be managing ESG and sustainability performance with the same rigor as financial performance.
EY teams can support clients as they seek to integrate ESG and sustainability into business strategy, and improve and communicate their ESG and sustainability performance to stakeholders.
This can help businesses to:
- Increase the value of sustainability and supply chain strategies
- Mitigate risk and build a reputation to maintain a social license to operate and grow
- Reduce costs
- Improve decision-making and increase operational and performance effectiveness to deliver long-term value
EY teams bring together professionals with experience in business, engineering, science and operations, and offer services to assist with the following:
- Sustainability strategy development, design and implementation support
- Stakeholder engagement, prioritization and analysis
- Materiality assessments
- ESG maturity assessments
- Advice on sustainability risks in the value chain
- Advice on responsible investment
- Supply chain sustainability management
- Circular economy mapping and advisory
- Code of conduct and ethics effectiveness and implementation assessments
- Training, development and capacity building
- Policy development and research
- Portfolio sustainability risk and opportunity assessment
EY teams can also support with:
EY teams have extensive experience assisting small and large financial institutions in developing and implementing responsible investment and ESG programs. This includes assisting with:
- Developing and refining overarching responsible investing (RI) policies and frameworks
- Implementing RI and ESG processes and controls to support consistent and timely decision-making
- Executing ESG due diligence
Institutional investors globally are redeploying capital to organizations that better manage these ESG risks. Businesses should therefore look to have a clear understanding of the full range and magnitude of issues that can impact their ESG performance, and help them attract and retain capital while protecting long-term value.
EY teams have developed the ESG Maturity Model to help organizations assess their ESG maturity, and to help align and close the gap between financial and nonfinancial performance.
Assurance over nonfinancial information – including ESG and sustainability – can help provide transparency and accountability to stakeholders, as well as assurance to management teams and those charged with governance over the quality of the information provided. Nonfinancial assurance can be provided in accordance with the relevant industry, sector or professional standards through the issuance of an independent assurance report.
ESG and sustainability assurance can take several forms, but typically focuses on:
- Disclosures, data, targets and KPIs relating to ESG and sustainability
- Integrated reports, including ESG and economic disclosures
- Sustainability, ESG, Task Force on Climate-Related Financial Disclosures (TCFD) or corporate responsibility reports
- Adherence to principles as defined by external or internal standards or codes of conduct
- Specific communications made to particular stakeholders or the board related to nonfinancial performance. For example, ESG metrics tied to executive compensation.
- Claims related to social and environmental outcomes of specific products or services
- Greenhouse gas emissions, including organizational or life cycle product greenhouse gas emissions inventories
- Carbon credits or offsets issues under voluntary and regulatory standards
- Green or social impact bonds against agreed criteria
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