Constellation ShortList™ Environmental, Social, and Governance (ESG) Reporting

Organizations are establishing policies to address environmental, social, and governance (ESG) concerns. The “E” policies are emerging in response to international treaties as well as the concerns of the general public, would-be customers, and business partners. Firms are also forging policies to protect workers and communities and to ensure workforce diversity and inclusion, including by suppliers. Tens of thousands of firms around the globe have made “E” and “S” commitments, and they’re adding governance measures to enforce their goals.

Today ESG commitments are mostly voluntary, but regulatory bodies such as the U.S. Securities and Exchange Commission and standards bodies such as the IFRS Foundation—which sets accounting stan- dards in more than 140 countries—are seeking to establish compre- hensive and consistent ESG-related standards. With billions of dol- lars flowing into ESG-guided pension funds, exchange-traded funds (ETFs) and mutual funds each year, the pressure is on regulators to ensure that companies are sharing trustworthy, comprehensive, and consistent data and reports related to ESG claims, not just selective PR talking points.

ESG reporting solutions address the need to efficiently gather ESG-related data and to analyze and report on that information comprehensively and consistently using leading reporting frame- works aimed at a range of stakeholders, including prospective and existing shareholders, employees, and customers; analysts and fund managers; the media and general public; and non-executive board members.

Threshold Criteria

Constellation considers the following criteria for these solutions:

• Facilitates formal data-gathering and data-management processes and approvals for those involved in ESG-re- lated reporting, including dedicated ESG teams, finance, corporate communications, human resources, facilities management, supply chain teams, marketing, and other operational units.
• Offers prebuilt integrations with popular data sources, including enterprise applications, databases, and operational control technologies.
• Automates, where possible, data-gathering, reporting, and disclosure processes to improve efficiency, ensure consistency, and minimize errors tied to manual data entry.
• Eases and/or automates the identification of financially material ESG issues and risks.
• Provides prebuilt workflows, report templates, and dashboards that can be customized.
• Facilitates reporting using multiple frameworks and standards and using consistent data to report to multiple stakeholders. Important frameworks include the Carbon Disclosure Project (CDP), Global Report- ing Initiative (GRI), the Task Force on Carbon-Related Financial Disclosure (TCFD), the EU Sustainable Finance Disclosure Regulation (SFDR), and the U.N. Principles for Responsible Investment (PRI).
• Speeds and eases disclosure via support for familiar publishing tools (Word, PowerPoint, PDF, HTML) and extensible Business Reporting Language (XBRL) filing mandates.
• Ensures auditability of data and reports.