Environmental, Social and Governance (ESG) Reporting – One Step Ahead

January 3, 2023
Reanda Biz Seeve

Sustainability has been one of the major concerns in the recent times. In the broadest sense, sustainability refers to the ability to maintain or support a process continuously over time. Sustainability is based on the three pillars: Economy, Environmental and Society. Accordingly, sustainable policies emphasize the future effect of any given policy or business practice on humans, ecosystems, and the wider economy. Many corporations are seeking to integrate sustainability practices into their core business models. Companies can adopt sustainability strategies in the same way that they develop their other strategic plans. Thus, corporates are now aiming on achieving the Triple Bottom Line (TBL). TBL is based on the concept of maintaining balance on profit, people, and the planet. The concept behind the triple bottom line is that companies should focus as much on social and environmental issues as they do on profits. Some investors are actively embracing sustainability investments, known as “green investments.” However, Skeptics have accused some companies of “greenwashing,” the practice of misleading the public to make a business seem more environmentally friendly than it is.

ESG Framework

Environment, Social and Governance (ESG) represents a more stakeholder-centric approach to doing business. There are various framework of ESG which includes Global Reporting Initiatives (GRI), Integrated Reporting (International Integrated Reporting Council), Sustainable Development Goals (SDG’s) etc. With the economic revolution and rampant industrialization environment and social norms were largely affected and hence the need of the effective Internal Governance was felt. The United Nations Millennium Development Goals (MDGs) subsequently followed by Sustainable Development Goals (SDGs) had laid a foundation where 17 goals have been committed by 193 member states of the United Nations, Nepal being one of them to achieve the said target by 2030 AD.

Nepalese Context

In the context of Nepal, ESG is in the primitive stage. Yeti Airlines and NMB Bank Limited has been actively contributing towards carbon emission disclosure and commitment. In terms of carbon footprint, Nepal footprint in carbon emission is 0.02% where as its neighboring country China and India has 29.18% and 7.09% respectively. Thus, with this there is a high change for Nepal to have greater Impact on the climate change irrespective of have negligible carbon footprint in the ecosystem. If we don’t change from now, we and our future generation has to bear the terrible consequences. Hence, it’s a high time for low carbon emission country like Nepal to unite and raise voice on the UN Environmental Committee and other concerned authorities relating to impact of higher carbon emission releasing country in the entire ecosystem.

Way Forward for Nepal

Thus, regulatory authority like Security Exchange Board of Nepal (SEBON) has to come up with the implementation guidelines for ESG implementation and corporate house are also expected to report ESG element voluntarily to demonstrate their ethical obligation towards all the stakeholders and the nation. Such reporting also demonstrate the transparency of their operation and attracts green financing. For this, the governance has to be reformed and has to demonstrate the seriousness of the impact of operation in the environment and the society at large. Companies need to set clear targets to reduce environmental, social, and governance risks. It is clear that businesses across the globe have advanced, from simply asking customers to recycle their plastic containers to embedding sustainability into the core of their business. This means creating sustainable practices and processes, developing ethical products, and leading a business strategy developed from a clear ESG strategy. Company may also use ESG reporting for transparency and accountability, to set benchmarks and targets, and to communicate ESG-related achievements. Followed by setting actionable initiatives that will support ESG compliance and reforming the existing organization’s strategy via ESG strategy. Through ESG Reports, investors can ensure they are making informed decisions with their money when it comes to investing in companies or funds with sustainable goals or values aligned with their own investment philosophy. The ESG Report hence helps companies to implement sustainable business practices by improving their corporate culture, reducing risk and increasing awareness.

How Reanda Biz Serve Can Help?

Creating the sustained growth that drive value, and strengthening the environment and societies is a bigger challenge for now. ESG is more than ticking the boxes. We at Reanda Biz Serve assist you in fulfilling your purpose and achieving your ESG goals with our industry experience and global alliances.