Climate Change & ESG Reporting

We continued our series of workshops for the Building Public Trust Awards 2022 with our session on Climate Change & ESG Reporting. The event attracted a large turnout – all eager to hear the latest thinking on non-financial reporting across the ESG (Environmental, Social and Governance) spectrum.

The audience members enjoyed three hours of lively, absorbing presentations and debates. The discussions delved into the forces driving change and evolution in organisations’ reporting on their societal and environmental impacts, and examined how some organisations are putting themselves in the vanguard. And we heard first-hand from world-leading experts ranging across award-winning corporate reporters, regulators, investors and PwC specialists.

Setting the scene on ESG

Opening the proceedings, Alan McGill – PwC’s Global Head of Sustainability Reporting & Assurance, and the sponsor partner of BPTA – mapped out the context for the three awards being showcased during the session. Two of the awards - Climate Change Reporting in the FTSE 350 (won by Aviva) and Social Reporting (won by Barclays) - had already been presented at the BPTA 2022 dinner whilst the award for ESG Reporting in the FTSE 350 & Public Interest Entities was won by GlaxoSmithKline, and was presented to GSK’s head of corporate responsibility, Sarah Dyson. Alan also launched our report on Excellence in ESG Reporting which showcases leading examples of reporting best practice.

Next up was Jon Williams, PwC Partner for Sustainability & Climate Change, who gave the audience a whistle-stop overview of PwC’s latest report on Excellence in Climate Change Reporting by leading UK companies. The overall picture? Lots of progress – but still a great deal more to do. “Fully 90% of companies were able to say they understand how climate change affects their strategy, business model, risks and opportunities,” Jon explained. “But only 20% – one in five – were able to link it to financial performance.”

Striking the right balance on climate change

To help define what the best climate change reporting looks like, Jon Williams was then joined by an expert panel. The panel stressed the need to strike the right balance between producing climate reporting that’s technically accurate and making it readable and accessible for wider stakeholders. Also key was board involvement and making sure that metrics included in the report are as robust as financial data. 

Another member of the panel stressed the need “not to let the perfect get in the way of the good” in climate reporting – with the nascent methodologies and prototype metrics meaning everyone must learn together.

Zeroing in on the “S”

The focus then shifted from the “E” to the “S” of ESG. PwC UK’s ‘S’ of ESG Lead and Partner Phillippa O'Connor set out the evolution of the award, explaining that – party due to lack of regulation – social reporting is currently more embryonic than environmental reporting. But this is changing fast. Whilst historically social reporting has primarily focused on employees, there is an emerging expectation for companies to report their interactions with a wider network of people, with an increasing focus in the coming years as the result of more standardised reporting, such as under the EU Corporate Sustainability Reporting Directive.

Phillippa and her PwC colleague, Angus Graham, described how pioneers like the BPTA Social Reporting Award winner Barclays are pushing the boundaries, by creating a compelling narrative that “weaves the aspects of social value into the overall story that they’re telling around people”. It’s a story that encompasses and links workforce, upskilling, supply chain and communities.

Where innovation meets regulation

The session closed with a panel discussion to consider the challenges and practical solutions needed for the fast changing ESG regulatory reporting landscape, chaired by PwC’s Alan McGill. As Alan highlighted, the award winners showcased during the day had all “pushed the button on innovation” without waiting for the regulations to catch up. But now a “storm” of regulation is coming at unprecedented speed, requiring companies to adapt at pace to report a higher volume of ESG information than ever before. 

The panel discussion brought together two top corporate reporters, an investor and a regulator –with several consistent themes coming across. One was a demand for greater consistency and alignment between jurisdictions, with regulations that are “similar but different” posing major challenges for all participants. Another was the importance of organisations investing in people and systems to ensure their ESG data has the same rigour as their financial data. A third was the need to embed ESG data into everyday decision-making. The panel summed up the widely-held view: “We don't want decisions to be made just on a financial basis. We want there to be a recognition of the other important impacts that decisions are going to have.”

Staying ahead of the curve?

The overall message is clear. The landscape of corporate disclosures is expanding beyond financial measures at breakneck speed. And, as our workshop session demonstrated, the leaders are applying reporting innovation to stay ahead of the curve. Is your organisation keeping pace? To find out more, please don’t hesitate to contact PwC’s reporting team. The future of corporate reporting is taking shape. Together, we can build it.

Contact us

Alan McGill

Alan McGill

Partner, PwC United Kingdom

Tel: +44 (0)7711 915663

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