Regulators in Canada are considering how the IFRS Sustainability Standards will be incorporated into Canadian regulatory frameworks. However, Canadian companies with an international footprint may already have met thresholds for mandatory ESG reporting in other parts of the world.
Preparing for mandatory reporting, depending on your current reporting processes and strategies, may be a multi-year endeavour. Once you've identified gaps in reporting and processes, the implementation plan will serve as the blueprint that will guide what steps to take, who will lead the charge and when it will get done.
The blueprint to guide ESG reporting
Fundamental components to consider to right-size and tailor the approach, based on where you’re at and where you need to go
1. Boundaries: What is the scope for each action and the timing to complete each step? Demand for action on ESG reporting is coming from different angles: regulatory requirements, stakeholder expectations, including customers, or your own ambition. No matter the angle, knowing how far and how fast to go will provide the boundary of your organization’s implementation plan.
2. Governance: Which stakeholders need to be involved and who is responsible for each step? A successful plan sets clear roles and responsibilities. Reporting teams are growing and collaborating more widely across organizations, often involving strategy, risk, finance, technology and legal — in addition to sustainability teams. As well, the board and executive are expected to play a larger role.
3. Level of effort: How simple is it to execute on steps in the plan? Depending on maturity, some are easier than others. More complex gaps, such as Scope 3 emissions disclosure and financial quantification of ESG risks and opportunities may require specialized skillsets and external support. Identifying realistic levels of effort will help identify the quick wins versus those that require heavy investment in time and resources.
4. Prioritization & sequencing: In what order will your team execute each step? For many, one of the first steps is conducting a materiality assessment, given that emerging standards and frameworks have different requirements when it comes to identifying material topics. From this, it's possible to determine the logical sequence. Are governance structures in place? Are there metrics to measure performance? Has a baseline calculation been set? Ask these questions among others.
