The U.S. Chamber of Commerce's Project for Growth and Opportunity, or Project GO, has published best practices for voluntary reporting of environmental, social and governance (ESG) information. The report suggests that ESG reporting can be best advanced through disclosure on a voluntary basis, rather than through additional regulation and mandatory "one-size-fits-all" disclosure regimes.
The best practices are intended to incorporate flexibility in the approach to ESG disclosure, recognising that the relevance of certain ESG factors differs across companies and across industries. The report identifies the following best practices, among others:
- ESG disclosures should focus on a company's risks and opportunities with sufficient potential to impact the company's long-term operational and financial performance in light of its business and should discuss the company's approach to risk management, making the connection, to the best of their ability, between the ESG topics on which they report and the company's long-term value creation strategy.
- Companies should consider the intended audience for the ESG disclosure and tailor reporting to include the most useful information for that audience.
- Companies should clearly define in plain English technical terms that do not have a universally accepted definition.
- Companies should explain why they selected the metrics and topics they ultimately disclose in ESG reports, including why management believes those metrics and topics are important to the company.
- Companies should consider including in voluntary ESG reports a description of internal review and audit processes or any external verification of the information that the company received.
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