Towards common metrics and consistent reporting of ESG performance
New expectations of reporting
Financial factors are no longer viewed as the only drivers of value. Companies are asked to report broader non-financial or ESG information in new ways to a wider range of stakeholders with intense focus on quality. Investors are triggering this change.
Reporting implications for companies
These transformational shifts mean that corporate reporting must demonstrate value beyond the financial accounts. The figure below is an example of dynamic materiality in an organization.
Financial and ESG influences on corporate reporting
To address the information gap, the ESG reporting landscape has been developing and innovating over more than two decades with multiple voluntary standards and frameworks available to business. We’re supporting initiatives across the reporting ecosystem and focusing efforts now to contribute to standard setter alignment.
PwC supports one globally accepted solution for ESG standards, building on the robust work already done.
WEF IBC Common Metrics and Disclosures
The World Economic Forum (WEF), the International Business Council (IBC), PwC and other services firms collaborated for the identification of priority universal metrics for long-term value creation to enable more consistent and comparable reporting for their stakeholders, including investors. During the process of the common metrics selection, a robust consultation with more than 200 companies, investors and other key players elicited valuable feedback. The feedback showed more than three-quarters of respondents agreeing that reporting on a set of universal, industry-agnostic ESG metrics would be useful for their company, financial markets and the economy more generally.
Strong IBC and non – IBC company support for the core metrics are shown in the following figure:
Investors are broadly supportive of the metrics and disclosures to streamline consistency and comparability. The metrics and disclosures were tested with 60+ investors who were engaged through workshops, one-on-one consultations and online surveys.
The collaboration resulted in a non – mandatory set of recommendations containing 21 core metrics (well-established standards) and 34 expanded metrics (wider scope/ impact) across 4 pillars: people, planet, prosperity and governance. For more information regarding WBS metrics click here.
