Find Your Fit

The ESG wave is cresting, and as it does, companies are being caught in various positions ranging from surfing it to being caught in the break. For those not yet riding the wave, there can be a lot of consternation that can ripple from the boardroom to the field. For Environmental Health and Safety Managers, this presents both risks and opportunity.  

The risks include being caught unaware by data requests, facing unrealistic expectations, or facing shifting benchmarks as companies try to navigate what are often uncharted waters. These uncertainties also provide opportunities, as understanding the currents and trends can give EHS managers the context to not only respond to requests more effectively, but also to help navigate. 

In general, the role of the EHS professional in ESG reporting is to provide data that best aligns with the standards a given company is using to report on their sustainability journey. Further, since ESG standards are by their nature comprehensive in covering Environmental, Social and Governance data, the primary concern for EHS professionals tend to be the E and a portion of the S (the safety part). Understanding what is critical information versus good-to-have and how the process can evolve over time will help empower you to do your job most effectively. 

While there is no single standard to follow, there are some standards that are ubiquitous enough that familiarity is warranted. The first of these is SASB, the Sustainability Accounting Standards Board. SASB standards are industry specific, and were developed specifically to be the minimum amount of disclosure topics needed that would be material for investors to be able to compare and make reasonable investment decisions. They can be considered the baseline for sustainability or ESG (or Corporate Social Responsibility, a term still in use that is analogous) reporting, are publicly available here, and are relatively user-friendly to determine which standards to use.  

Look for the disclosure topic tables in your industry to get straight to the heart of what you will need to know.  

Figure 1. Sample SASB Disclosure Topic, GHG Emissions, Oil Exploration & Production

While topics vary by industry, the environmental topics you are likely to see include Greenhouse Gas Emissions, Air Quality, Energy Use and Ecological Impacts, though there are several cases where one or more of those may be missing as it may not be deemed material by the SASB committees. You may also see topics such as Supply Chain, Water Management, etc. depending on your industry, and there are unlikely to be surprises as these should align with your largest environmental impacts (per an EMS aspect/impact analysis or similar).  

For the safety side of the work, you may see topics such as Operational, Safety, Emergency Preparedness & Response, Workforce Health & Safety or Critical Incident Risk Management.  

In all cases, there will be one or more Accounting Metrics identified, which will be further categorized as Quantitative or Discussion & Analysis. The unit(s) of measure will be defined, and a specific code assigned to each. There will also be one or more Activity Metrics defined at the bottom of the topic disclosure table, which can be thought of as normalizing values analysts and others can use to create intensity metrics that look at things like per unit sold or per barrel of oil produced to make comparisons. 

Downloading and taking a look at the applicable table for your industry and keeping it handy is a relatively easy way of staying ready to respond to any requests as well as a great means to proactively align your board and start paddling to catch the wave. Creating a checklist based off this table and identifying data locations, values, and any gaps is a straightforward exercise that can demonstrate the type of initiative and company-wide value that gets noticed (in a good way). Third-party consultants (such as Spirit Environmental) can also accelerate the process and provide valuable assurance that you are aligned properly. 

There are many more standards to consider aligning with, most notably the Global Reporting Initiative and the Taskforce for Climate-related Financial Disclosures, but the first place we recommend our clients to start and the most directly material to overall corporate performance, is the SASB standards. For more information, reach out to our Sustainability Program Manager, Conor Merrigan

Related Publications
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