ESG Sustainability Reporting: Moving Toward a Net-Zero Economy – TCFD is Coming | PEN Partnership X Informatica

2022-03-29 |  Guest Writer: Levent Ergin

The following article is written by our guest writer, Levent Ergin, Head of Data Governance, Privacy & ESG UKI Strategic Accounts, Informatica

The landscape of environmental, social, and governance (ESG) regulations is rapidly evolving. On October 29, 2021, the U.K. Government enshrined into law that from April, 6, 2022, onward, 1,300 of the largest U.K companies and financial institutions will be required to share climate-related information on a mandatory basis, in line with the guidelines set by the Task Force for Climate Related Financial Disclosures (TCFD).

In the E.U., ESG disclosures are already mandatory for 11,000 asset managers and other financial market participants according to the Sustainable Finance Disclosure Regulation (SFDR). As of December 2022, further Level 2 disclosures will be required by the SFDR, comprising a variety of quantitative ESG criteria.

On April 21, 2021, the European Commission adopted a proposal for a Corporate Sustainability Reporting Directive (CSRD), amending the existing reporting requirements of the Non-Financial Reporting Directive (NFRD) and extending the scope to all large companies in 2023. This brings an additional 50,000 large public-interest European companies into the scope of mandatory ESG reporting.

In September 2021, the Securities and Exchange Commission (SEC) in the U.S. issued a “Sample Letter to Companies Regarding Climate Change Disclosures.” In light of this, firms should be prioritizing their ESG data management for mandatory disclosures or risk penalties with regulators and shaken confidence from investors. 

The Importance of an ESG Framework

It is critical for multinational companies to have a robust ESG data management framework in order to not only comply with these numerous ESG and sustainability reporting standards globally, but to be able to extract value from their ESG data and processes at the same time. ESG reporting is a complex landscape, one that requires its audience to come to grips with the acronym soup.

Giving an overview of the complexity of ESG reporting, here’s a quick look through ESG goals and principles, reporting frameworks, and ratings and indices, as well as the regulations which our ESG customers have to navigate through.

ESG Goals and Principles

  • UN Global Compact
  • Sustainable Development Goals
  • Green House Gasses Protocol
  • Principles for Responsible Investment

Reporting Frameworks

  • CDSB – Climate Disclosures Standards Board
  • GRI – Global Reporting Initiative
  • SASB - Sustainability Accounting Standards Board
  •  ISO 14001, 26000, etc.

ESG Ratings & Indices

  • MSCI
  • Bloomberg
  • Sustainanalytics
  • Dow Jones Sustainability Indexes

ESG Regulations

  • TCFD – Task Force on Climate Related Financial Disclosures
  • EU Taxonomy
  • SFDR - Sustainable Financial Disclosures Regulation
  • SCRD - Corporate Sustainability Reporting Directive  

Making sense of ESG reporting requires a methodical approach to data management, governance and reporting. Informatica can help you harness the power of AI-powered data management technology to get ready for all your ESG reporting needs.

Next Steps

Join us for our upcoming ESG Data Management & Governance webinar, featuring Barry Chapman, Associate Partner at PEN Partnership, Leo Chancellor, Associate Partner at PEN Partnership, and Levent Ergin, Data Governance, Privacy & ESG Domain Expert at Informatica, to discuss:

  1. The changing regulation and reporting landscape
  2. Common trends both PEN and Informatica are seeing with clients
  3. How data governance and data tooling can help

To be part of the conversation, sign up here.