The Financial Reporting Council’s ESG and Climate Group has published a new guide designed to help companies collect better ESG data and use it more effectively.
The report said it is clear that the current data landscape is a complex one with challenges for boards and executives on how to identify and use the more relevant information.
The report outlines a series of positive actions executives can take to address some of this challenges. It said it hopes this will help boards optimise how they collect ESG data, and use this information to support better decision making.
The FRC’s ESG statement of intent published in 2021 identified that the systems producing, distributing and using ESG data are significantly less mature than those for financial information. This new report focuses on how companies can improve their ESG data for effective decision-making. It sets out the three key elements of ESG data production: motivation, method and meaning, and within each area explore the questions board members need to ask and actions they can take to improve ESG data collection.
Chair of the FRC ESG and Climate Group Josephine Jackson says: “High-quality data is critical to high-quality decision-making. Improving the systems and processes for the production of ESG data, as well as embedding a joined-up approach to data collection will result in better decision-useful information. In turn this will lead to more relevant and reliable disclosures for all users who rely on companies for clear reporting of ongoing performance and future prospects.”
