ESG Reporting & Disclosure

ESG ReportingReporting

T3’s ESG Reporting services are tailored to help businesses effectively integrate ESG metrics with their core strategies, providing clarity in navigating the complex requirements of ESG reporting and ensuring alignment with evolving sustainability goals.

ESG Reporting: How to Navigate the Latest Requirements and Best Practices

With the EU’s Sustainable Finance Disclosure Regulation (SFDR) and the CSRD, ESG reporting is no longer a choice but a compliance necessity. For instance, the SFDR requires financial market participants in the EU to disclose sustainable investment information, impacting over 12,000 firms. Navigating the intricate ESG landscape requires expertise, precision, and a deep understanding of global and regional standards. Whether you’re a budding enterprise or a global conglomerate, ESG Reporting & Disclosure is no longer optional—it’s imperative. As the ESG landscape has transformed, so have the complexities of data sources and reporting requirements. T3’s services are crucial in helping businesses navigate this complex regulatory landscape, ensuring their ESG reporting aligns with such evolving standards and helps them stand out in a marketplace where sustainable practices can lead to a 29% increase in sales, as per a Nielsen survey.

Here’s an in-depth look at key reporting developments:

  • SFDR Overview: The SFDR is a regulation that requires financial market participants and financial advisers in the EU to disclose how they integrate sustainability risks into their investment decisions and advisory processes. It’s aimed at increasing transparency in how sustainability factors are considered in the financial sector.
  • Scope and Impact of SFDR: The SFDR impacts over 12,000 firms, including banks, insurance companies, pension funds, and asset managers. These entities must make detailed disclosures on the sustainability risks of their investment products and how these risks are managed or mitigated.
  • CSRD Complementing SFDR: While the SFDR focuses on the finance sector, the CSRD extends the scope of ESG reporting to a broader set of companies. It mandates more detailed sustainability reporting, requiring companies to provide information on their impacts on people and the environment.
  • Mandatory Nature of ESG Reporting: With these regulations in place, ESG reporting has become mandatory for a wide range of companies. This shift marks a significant departure from the previous approach where ESG reporting was largely voluntary and driven by market or shareholder demands.
  • Complexities in Reporting: As the ESG landscape evolves, so do the complexities associated with data sources, reporting standards, and requirements. Companies now face the challenge of collecting, analyzing, and reporting a wide range of ESG data in a manner that complies with these new regulations.
  • Need for Expertise and Precision: Navigating this intricate ESG landscape requires specialized knowledge and precision. Understanding the nuances of global and regional ESG standards is crucial for compliance and for leveraging ESG reporting as a strategic tool.
  • Business Implications: ESG reporting is not just about compliance; it’s also a strategic imperative in today’s market. Companies that excel in ESG practices can distinguish themselves, with research like the Nielsen survey indicating that sustainable practices can lead to a 29% increase in sales.
  • Investor and Consumer Interest: There is a growing interest from investors and consumers in sustainable business practices. ESG reporting provides these stakeholders with the necessary information to assess a company’s commitment to sustainability, influencing investment decisions and consumer behavior.
  • Role of Service Providers: In this context, the role of service providers like T3 becomes vital. They assist businesses in navigating this complex regulatory landscape, ensuring that their ESG reporting is not only compliant but also strategically positioned to enhance their market standing.
  • Global Trend Towards Sustainability: The EU’s initiatives are part of a global trend towards integrating sustainability into financial and business decision-making. This trend reflects a broader societal shift towards valuing sustainability and the long-term viability of business practices.

Beyond Compliance: The Business Case for a Purpose-Driven ESG Strategy

While platforms like MSCI or Sustainalytics, Bloomberg or Refinitiv offer valuable ESG data insights, there isn’t a one-size-fits-all solution. Manual intervention, data orchestration, and bespoke solutions are often required to ensure comprehensive and accurate ESG reporting. Recent regulations, such as the “EU Sustainable Finance Disclosure Regulation” and the “SEC Climate Risk Reporting Guidelines” in the US, further underscore the importance of robust ESG data management and reporting.
Public companies and large multinational entities must ensure sufficient internal controls to obtain limited and reasonable assurance on non-financial ESG-reported data by 2024. Registered public accounting firms can provide either outsourced ESG internal audit services or ESG assurance services, but not both to avoid a conflict of interest. In addition, companies should engage environmental and diversity, equity, and inclusion consultants to develop an ESG strategy and a technology partner to provide an audit trail and data collection and management processes.
More than 90 percent of publicly traded companies voluntarily report in adherence to one or more ESG frameworks. Furthermore, companies can follow various frameworks and guidelines to ensure ESG compliance, such as the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI). In addition, many companies are now required by law to disclose their ESG practices and performance, such as in the European Union under the new ESG Disclosure Regulation (see SFDR).
By demonstrating ESG compliance, companies can build trust and credibility with investors, customers, and other stakeholders, which can help to attract investment, improve reputation, and drive long-term financial success.


All firms that falls under mandatory ESG disclosure or would want to start disclosing voluntarily ESG

Asset Managers
Commodity Houses

How Can We Help?

At T3, we understand the nuances of ESG Data & Reporting. Our services encompass an assess/design/implement approach:


Data Assessment

Assessing your current state disclosures in relations to various reporting requirements. Evaluating your current ESG data sources, ensuring they align with global standards and your organizational goals. Identifying gaps for remediation.


Remedy Data Gaps

Once gaps have been identified, closing any deficiencies in the data collection, or aggregation is key to ensuring comprehensive coverage and relevance to your ESG objectives.


Enhance Internal Controls

Assisting in establishing robust internal controls for ESG data, ensuring accuracy, and credibility.

Guiding your organization in adhering to globally recognized ESG frameworks like SASB and GRI.
6. Regulatory Compliance: Guiding you through the complex landscape of global & regional ESG reporting requirements, ensuring adherence to regulations like the EU’s SFDR, the US’s SEC Climate Risk Reporting Guidelines or the UK’s Streamlined Energy and Carbon Reporting (SECR) framework.


Technology Integration

Partnering with leading technology solutions to provide seamless data collection, management, and an audit trail. We can help you assess and pick the best technology partner for you.


Climate Risk Assessment: A Step-by-Step Guide for Financial Institutions

  • Identify and Quantify Climate Risks: We analyze your exposure to physical climate hazards (extreme weather events, rising sea levels) and transition risks (regulatory changes, carbon pricing) through a comprehensive assessment.
  • Vulnerability Mapping: We pinpoint areas of your business most susceptible to climate disruptions, including your operations, supply chain, and physical assets.
  • Financial Impact Assessment: Quantify the potential financial losses associated with climate risks, providing a clear picture of potential impacts on your bottom line.
  • Scenario Planning: We help you develop robust scenarios for different climate futures, allowing you to test your resilience and identify strategic adaptations.
  • Regulatory Compliance: Stay ahead of evolving climate disclosure regulations like TCFD (Task Force on Climate-related Financial Disclosures).


Stakeholder Engagement

Crafting communication strategies to keep stakeholders informed, building trust, and enhancing transparency.


Continuous Monitoring

Offering ongoing support to ensure your ESG data and reporting evolve with global standards and organizational growth.
T3 will help you assess where you stand and guide you towards where you want to go. T3 will guide you every step of the way from designing the best way to collect data, or potential solution providers to externalise part or all of the ESG technology journey. T3 will also help you understand how AI could be integrated in the tools used.


Climate Risk Scenario Analysis

We help financial services firms navigate the ever-evolving landscape of climate-related financial risks and opportunities through a robust Climate Risk Scenario Analysis.

Here’s how our offering empowers you:

  • Tailored Scenarios: We work with you to design bespoke climate scenarios aligned with your firm’s specific exposures (e.g., geographic, sectoral). Scenarios will draw on recognized frameworks like those from the Network for Greening the Financial System (NGFS), helping you satisfy regulatory expectations.
  • Data-Driven Risk Quantification: Our advanced analytics translate Climate Risk Scenario Analysis into both physical risks (extreme weather events, rising sea levels) and transition risks (policy changes, technology shifts, market sentiment). We’ll estimate their potential impact on your credit risk, market risk, operational risk, and reputational risk.
  • Identifying Opportunities: We go beyond risk, mapping out climate-related investment opportunities revealed through our Climate Risk Scenario Analysis. This could mean new financial products catering to sustainable initiatives, potential for green lending growth, and unlocking climate-aligned investments.
  • Strategic Decision Support: Our analysis provides actionable insights that inform your climate-risk management strategy, portfolio adjustments, and resource allocation. We help you align your investment decisions and risk tolerances with your climate-related ambitions.

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