Your Getting Started Guide to the E in ESG

Written By Megan Pillsbury

There’s never been a better time to start ESG reporting, and if you aren't already doing it, you're behind. 

Your company wants to begin the ESG (Environmental, Social, and Governance) reporting process. That’s a significant first step. But where to start? An abundance of acronyms and confusing terminology can make it challenging to get your bearings. 

We have met numerous companies that were put off by this perceived complexity. They enthusiastically started searching for information but quickly became overwhelmed by the sheer number of resources and services to choose from—and the minimal guidance available for navigating them. 

Do not give up. There’s never been a better time to start ESG reporting, and if you aren't already doing it, you're behind. 

Industry experts tell us that, within a decade, ESG reporting will be as standard for corporations as financial reporting. By preparing now, you will gain invaluable insights into significant risks and opportunities before you are legally required to disclose them to the public. 

Here’s the good news. Getting started is simple once you understand its confusing jargon and know where to begin.  

In this post, we’ve broken down the process of navigating the environmental reporting process. Think of it as a stepping stone for how to get started on a professional and beneficial ESG journey. 

Now let’s dive in. 

The “E” in ESG reporting: Climate & Nature

The environmental criteria of ESG can be broken down into climate and nature disclosures. 

Climate change is the most important global issue of our time. But biodiversity loss and ecosystem degradation are also emerging as critical issues, which we bundle into the term ‘nature.’ Though climate and nature are heavily intertwined, we suggest looking at them separately to simplify the ESG process. 

Climate disclosures focus on the risks and impacts of climate change in relation to your business. This includes extreme weather events like floods and droughts, as well as the indirect ways your business will be impacted by a warming planet, like higher air conditioning costs.  

Similarly, nature disclosures focus on the business’s impacts and dependencies on biodiversity and other ecosystem services. It covers how your business affects nature, how its dependence on nature may be affected in the future, and what you will do differently to reverse these effects. 

On top of the physical impacts of climate and nature risks on your company, both reporting areas also consider transition risks. These address how a government or society may intervene in your company’s operation. Transition risks include legal risks, reputation risks, market risks, and more.  

Though climate and nature are heavily intertwined, we suggest looking at them separately to simplify the ESG process.

First Step: Climate and GHG Emissions

Between nature and climate disclosures, we recommend beginning with climate, as the frameworks and methodologies are more mature, and investors and regulators are moving quickly to demand transparency. In fact, if you are not already measuring and reporting your GHG emissions, you are already behind. It’s time to make moves and catch up with the industry. 

If you are not already measuring and reporting your GHG emissions, you are already behind. It’s time to make moves and catch up with the industry. 

1. GHG Protocol

To prepare disclosures, the GHG Protocol is an excellent starting point and resource for creating an inventory of your company’s greenhouse gas emissions. As the world’s most widely used greenhouse gas accounting standard, it’s the preferred tool of more than 90% of Fortune 500 companies.  

Once you provide the required information, the GHG Protocol computes your company’s direct and indirect emissions through a universally accepted methodology that is easily applied to other frameworks, allowing for a streamlined reporting process. 

The GHG Protocol is the perfect place to begin your reporting as it allows you to easily and effectively report on your company’s emissions and get an idea of the significance of your impact. 

2. TCFD

Once you calculate and report your greenhouse gas emissions, you can use the Task Force for Climate-related Financial Disclosures (TCFD) framework to guide you through how to measure and understand the risk climate change poses to your business. 

While the GHG Protocol measures your company’s impact on climate change, the TCFD framework lets you look in the other direction—at how the changing climate will affect your business. 

Depending on the company’s location, certain environmental factors will have a more significant impact than others. This framework helps you consider the business’s susceptibility to location-specific natural disasters like wildfires and floods and how to report their risk to investors and regulators. 

In other words, the TCFD improves transparency between your business and investors about how a changing climate may impact business operations in future decades. This can instill confidence, as it lets them know that you are both informed of the risks and prepared to manage them. 

3. SBTi

Once you know your company’s climate footprint, it’s possible to set goals to decrease it. 

The Science Based Targets Initiative (SBTi) provides guided advice and resources to curate realistic, achievable targets for minimizing emissions. You can publish these objectives publicly on SBTi’s Target Dashboard to demonstrate your commitment to reducing your climate impacts and risks. 

This extra accountability signals to the market that you are serious about your targets, which can enhance brand reputation and improve confidence in your ability to meet investor demands. 

The GHG Protocol is the perfect place to begin your reporting as it allows you to easily and effectively report on your company’s emissions and get an idea of the significance of your impact. 

Second Step: Nature 

After you have a handle on your company’s relationship with climate, you can focus on the nature side of the equation. 

Reporting on nature is complex. It encompasses numerous issues, including biodiversity loss, deforestation, marine ecosystem impacts, pollution, etc. You will need to follow a similar procedure to address nature-related risks and opportunities and then set goals to reduce your business’s footprint.

4. TNFD  

We recommend you start with the Task Force for Nature-related Financial Disclosures (TNFD) framework to understand how nature can impact the future of your business. 

Like the TCFD mentioned earlier, both your dependencies on nature and your impacts on it will be covered in these reports, making it a comprehensive overview for all nature-related risk reporting. This improves your business’s resilience to change and proves to investors that you are prepared for the future. 

Better still, both the TNFD and the TCFD are well respected and can frequently be used alongside other frameworks to facilitate future disclosures. 

5. SBTN

Once you have your business’s dependencies and impacts recorded, it’s possible to set goals to reduce them. A very similar platform to that of climate-related disclosures, the Science-Based Target Network (SBTN) shares criteria that allow you to set realistic goals to minimize nature-related dependencies and risks. Furthermore, SBTN also lets you publicly report these targets to demonstrate your commitment to nature-related disclosures. 

Once you have set your nature targets, you are on a strong path to sustainability.  

Take Steps Towards Implementing the ESG Framework Today

For companies in the 21st century, establishing an ESG reporting framework is an increasingly critical business practice. The process may seem intimidating initially, but this guide will help you determine which resources to use to get started. After the first few steps, your path will become clearer and opportunities will present themselves. Below we provide additional resources that you may need along your journey toward sustainability.

Combined, these tools will create value and a competitive advantage for your business, proving it is ready for the future. 

By getting a head start on putting your company and the planet first, you have more time to implement better internal practices and create an advantage your competitors will scramble to catch up to.

There’s no time to waste. Start your ESG journey today and prove to employees, customers, and shareholders alike that your company is ready to face the coming decades of uncertainty.  

Combined, these tools will create value and a competitive advantage for your business, proving it is ready for the future. 

Additional Resources 

However, there are many other reporting frameworks that focus on specific stakeholder sets. The following list outlines additional frameworks that we suggest you consider: 

  • Global Reporting Initiative (GRI): allows your company to communicate the severity of your environmental impact to stakeholders through the ESG reporting process.

  • Carbon Disclosure Project (CDP): provides more statistics and numerical data collections to quantify your company status against peers, further demonstrating commitment.

  • International Sustainability Standards Board (ISSB): takes your climate- and nature-related risks and provides financial information in alignment with standard financial reporting. 

  • ISO14001: metrics established for initiating and managing a company’s environmental management system. Achieving an ISO14001 certification adds another level of transparency and commitment. 

And in the European Union, which leads globally in sustainability regulation:





Megan Pillsbury
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