ESG for Public Companies

ESG programs for publicly traded companies

Dedicated support to help public companies prepare themselves for future growth.

In today’s world, environmental, social, and governance (ESG) is a core pillar of value creation for businesses. Due to an evolving set of expectations from stakeholders and pending regulatory requirements, ESG is no longer a discussion—it’s a necessity.

If public companies want to maintain their access to capital markets and be positioned for long-term success, investing in an ESG program is essential.

ESG issues specific to publicly traded companies

Every industry has different driving forces behind its consideration and development of ESG programs. The following issues are material to publicly traded companies:

Climate change is a topic of increasing interest to investors, lenders, and other stakeholders. Many of the economic decisions now consider how entities are responding to climate-related risks, with increasing pressure to disclose their response to these risks in the annual reports and financial statements.

While Accounting Standards do not explicitly refer to climate-related matters or require entities to consider them yet, if those matters are material in the context of the financial statements, entities may be required to disclose them when compliance with a specific requirement in Accounting Standards is insufficient, which hinders investors from understanding the impact of climate-related matters on the entity’s financial position and financial performance.

An entity’s good standing in the eyes of its customers, employees, and the general public depends on effective ESG programs that demonstrate commitment to strong social and environmental values. Investing early on in the development and implementation of ESG doesn’t only provide a competitive advantage for expanded client acquisition, but also plays a key role in attracting and retaining talent in defense against the great resignation.

Jurisdictions around the world are moving quickly towards the development and implementation of ESG-related regulatory requirements for a range of entities including publicly listed, government sector, and private entities. It is crucial to stay informed on developments within the jurisdiction of operation and where supply chain or customers operate to begin developing strategies, systems, and controls for providing these disclosures, rather than waiting until the effective date.

For further information on the regulatory landscape relating to sustainability and climate reporting, see our BDO publication summarizing the state of affairs as of the beginning of 2023.

ISRB 2024/01 31 December 2023 Year-end Sustainability Reporting Update - BDO

Having an ESG strategy is becoming an access to capital issue. As a result of the 2022 Federal Budget, banks and insurance companies will be required to disclose climate-related risks and exposures¹. This means that having an ESG program will be linked to lending criteria.

_{1. Consumers Demand Sustainable Products And Shopping Formats, Forbes, Mar. 11, 2022.}

Investing in an ESG program is more important now than ever. Publicly traded companies need to be aware of the increased pressure to measure and report on ESG metrics and demonstrate impact on issues that matter. Forming an effective, sustainable ESG strategy and leveraging technology to support your ESG journey will optimize growth and set your organization up for long-term success.

Simon Hutton
National Sustainability & ESG Leader