Material ESG factors can affect your company’s long-term value and can be deciding criteria for convincing your investors to allocate funds to your business. Materiality combines factors that directly and significantly influence your company’s economic, environmental, and social impacts.
To prove your company is fit to join the green transition successfully, you will most likely be asked to present an ESG report, a document that communicates a company’s environmental, social, and governance performance.
These three criteria are essential in measuring the sustainability and societal impact of a company. According to GPW’s reporting guidelines and the Euronext ESG guide, they can be summarized as follows:
Environmental factors - they measure the company's impact on climate change, pollution, and the natural planet overall. They include but are not limited to greenhouse gas emissions, waste management, energy efficiency, and biodiversity.
Social factors - they refer to the company's impact on humans and, in turn, how humans can affect the company. The categories included are employees, clients, suppliers, and communities. Some of the matters to be considered to measure social impact are labor relations, health and safety, diversity and inclusion, and fundamental human rights.
Governance - it identifies the internal system of practices, controls, and procedures a company adopts to govern itself and make decisions about its size and its business model, ambition, and priorities.
In this action module, we will explore the most common framework and guide you on tackling sustainability (i.e. how a company or investment impacts the world) and ESG (i.e. how the world impacts a company or investment) reporting.Take our quiz to choose a fitting frameworkESG Guide by EuronextESG Guidance by GPW
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