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Effective ESG reporting? Must be Extolla

ESG 2024

Mandatory ESG reporting is coming from 2024 – Extolla’s ESG expert Andy Sun reveals ways to get ahead.

Everyone knows what ESG stands for. But from 2024, companies will also need to know how it impacts every aspect of supply chain, as climate-related disclosures become mandatory for financial reporting in line with international standards.

Whilst the exact requirements are still to come for Australian corporations, there is no doubt that ESG has shifted from an afterthought to a board-level priority where ESG knowledge across supply chains is quickly becoming critical.

At Extolla, we are leveraging our global supply chain expertise to help Australian businesses get up to speed with international counterparts, where ESG reporting is the norm.

Here are key steps to take now for Environmental, Social, and Governance reporting success:

Set Up ESG Processes

Prepare for the transparency and auditing of ESG reporting by establishing internal systems and processes to track and analyse ESG performance.

Consider as a minimum:

  • Establishing a board-led governance structure
  • Setting up a due diligence process across complete value chains
  • Integrating ESG into corporate risk management systems

ESG reporting requirements may vary based on industry, geographic region, and stakeholder expectations. Keep current with reporting frameworks and the information required for specific supply chains.

Map Supply Chains and Gather Data

Chart supply chains for insights into supplier tiers, subcontractors, and raw material sources and collect supplier operations data to pinpoint ESG risks, weaknesses, and improvement prospects.

Data for each supply chain should include:

  • Environmental: Examine the impact of sourcing, production, transportation, and disposal. Track and report metrics, including energy consumption, greenhouse gas emissions, waste generation and management, water usage, and biodiversity impact. 
  • Social and labour: Social data in supply chain should include information about worker health and safety, working conditions, human rights, diversity and inclusion, and resilience in times of crisis. Gather relevant audits, certifications, and assessments.
  • Governance data: Governance covers compliance, risk management, ethics, anti-corruption measures, and supplier engagement. Document policies, codes of conduct, and standards, and track their implementation and effectiveness.

Set Performance Indicators and Targets

Revise or create precise ESG policies and goals for tracking progress and demonstrating commitment to sustainable practices, such as reduction targets for greenhouse gases, waste, or non-compliance. Collecting performance data against these indicators aids in reporting and industry benchmarking.

Bring in ESG Experts

Get ESG reporting ready by bringing in expert guidance now. At Extolla, we will help you to understand the what, why, when, and how of ESG reporting. ESG is more than just a set of obligations – it is a roadmap to a sustainable and responsible future and a huge opportunity to stand out in competitive markets. Use it to your advantage.

Extolla Senior Director Dr Andy Sun is a global expert in sustainability in supply chain management. A United Nations Sustainable Development Goals (UNSDG) Project Ambassador for China and Hong Kong, Andy leads Extolla clients in adopting cutting-edge ESG practices.

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