WHETHER regional businesses want to or not, if they want to be competitive in the global market they must focus on environmental, social and governance (ESG) management.
At a one-day workshop on ESG practices hosted by the TT Chamber of Industry and Commerce, Westmoorings, more than 100 attendees were reminded that when dealing with global partners, one of the first conversations to have is about how they deal with ESG practices.
But for TT, and in many other instances globally, standards for transparency in ESG practices remain a challenge. Companies are faced with too many different standards, which gives companies leeway to play coy with their corporate social responsibility.
According to financestrategists.com ESG is an investing philosophy where standards of social responsibility are considered when evaluating a company for investment, rather than only maximising return on investment.
At the Chamber’s session on Wednesday, businesses said there were many challenges to proper ESG reporting too much ambiguity and called for a single standard practice for all companies to adhere to.
“We do not as yet have one standard,” said one business representative. “If you look at annual reports in the Caribbean and we look at the ESG section it is as diverse as the ocean. It is what we choose to report on.”
The representative said one of the main challenges when convincing business leaders about the importance of reporting ESG practices is the diverse reports on how it can be integrated into their businesses.
[caption id="attachment_1008382" align="aligncenter" width="273"] Maria Daniel -[/caption]
“Then you have auditors coming in and asking about ESG for a framework that does not exist legally,” she said. “There is a disconnect between what the standards say, which is not uniform, and the legislative backing for it.
The situation is unlike to the securities sector where there is local legislation that guides businesses on what a report should look like.
Marcus Jardine, associate partner at Ernst and Young, agreed with the representative, saying that at one point there were over 600 different bodies for disclosure on ESG practices.
“On top of those 600 disclosures you also have financiers and other people you wanted to transact with,” he said. “The challenge to this number of disclosures is that on one side you had this sphere where a lot of businesses really wanted to immediately embark on the ESG journey, but at the same time you have this regulatory fog where people are unsure in terms of what does 'good' look like, how do I know if I am getting better, how do I know if I am even doing or recording what is meaningful to stakeholders.”
Jardine, however, said there will be a single standard for ESG reporting through the establishment of the International Sustainability Standards Board (ISSB)
The ISSB was established in 2021 at COP 26 in Glasgow, after several global entities called for it to be set up.
The ISSB has international support to develop sustainability disclosure standards and is ba
