Mastering Sustainability:

The Essential Guide to

Reporting and Compliance
in 2024

1
#
Contents
Welcome to the New Era of Sustainability Reporting 3

Sustainability Reporting Is Table Stakes 4

STEP 1 - Identify Priorities 5

STEP 2 - Measure Progress 6

STEP 3 - Communicate Progress 8

STEP 4 - Strive For Continuous Improvement 11

How Businesses Can Prepare 12

Partner with a Trusted Advisor 14

Conclusion 16
Welcome to the New Era
of Sustainability Reporting
As sustainability inquiries from customers continue to rise and investors sharpen their focus on
environmental, social, governance (ESG), businesses are facing increasing demands to address
climate change and minimize emissions across their value chains. Coupled with an ever-evolving
landscape of sustainability regulations, integrating sustainability is not only essential for ensuring
long-term growth and success, but also for ensuring regulatory compliance, meeting stakeholder
expectations, and maintaining brand relevance.
Given these circumstances, sustainability reporting has become a vital tool for communicating
dedication and progress toward sustainability objectives. Today, sustainability reporting has
evolved to encompass both financial and non-financial factors, providing a comprehensive view of
sustainability efforts.
Explore the transformative power of sustainability reporting in shaping a better future for all.
Sustainability Reporting Is Table Stakes
The Statistics Speak Volumes
In today’s business landscape, sustainability reporting has transformed • Consumers Respond to Sustainability. Sustainability-marketed
into an essential pillar, shaping decisions, mitigating risks, and setting products grew ~2x faster than conventionally marketed products
companies on a path to a brighter tomorrow. from 2017 to 2022.3
• Investors Consider ESG Factors. Approximately 89% of investors • Rising Investor Demand for Reliable Sustainability Reporting.
consider ESG factors in their investment decisions, reflecting a 94% of investors believe corporate reporting on sustainability
growing trend of conscious investors.1 performance contains unsupported claims and three-quarters of
investors say sustainability is important to their investment decisions.4
• All-Time-High in Companies Reporting. Of the world’s top 250
companies, 96% are providing some form of sustainability reporting.2 • Job Seekers Favor Sustainable Employers. Two-thirds of individuals
show a greater willingness to apply for (67%) and accept (68%) jobs
• Compliance is Driving Action. Governments are introducing laws to from organizations they perceive as environmentally sustainable.5
mandate sustainability disclosure, including the U.S. Securities and
Exchange Commission (SEC) and European Union. Although many companies today understand the importance of
sustainability reporting, the endeavor can present a great challenge,
• Urgency for Climate Action. Rising climate legislation and emission requiring significant time and resources from teams and consolidation
expectations drive companies to set goals, engage their value chain, of disparate information and data.
and discuss climate action.
Given these hurdles, how can companies develop effective
sustainability reporting strategies?

Notes
• Capital Group ESG Global Study 2022. For more information: https://www.capitalgroup.com/institutional/investments/esg/perspectives/esg-global-study.html
• KPMG’s Global Survey of Sustainability Reporting 2022. For more information: https://assets.kpmg/content/dam/kpmg/sg/pdf/2022/10/ssr-small-steps-big-shifts.pdf
• Sustainable Market Share Index (April 2023). For more information: https://www.stern.nyu.edu/sites/default/files/2023-04/FINAL%202022%20CSB%20Report%20for%20website.pdf
• PwC’s 2023 Global Investor Survey (November 2023). For more information: https://www.pwc.com/gx/en/news-room/press-releases/2023/pwc-2023-global-investor-survey.html
• IBM Global Consumer Study: Sustainability Actions Can Speak Louder Than Intent (April 2022). For more information: https://newsroom.ibm.com/2022-04-13-IBM-Global-Consumer-Study-Sustainability-Actions-Can-
Speak-Louder-Than-Intent
 STEP
Identify Priorities
1
Stakeholder Engagement
• Establish an ESG governance structure/committee for your company, engaging key
internal and external stakeholders such as the board, various department representatives,
and your sustainability team. This sets the stage for embracing sustainability at all levels of Double Materiality
the organization.
While materiality
• Define how your company’s ESG issues will be managed and how decisions will be made. traditionally concentrated
• This could encompass how oversight of ESG issues and performance is integrated into on how sustainability
board and executive responsibilities. issues can affect the
company itself (inward
Materiality Assessment impacts or financial
materiality), double
• Once the relevant stakeholders are identified, perform a materiality assessment to identify materiality takes it one step
your company’s most significant economic, environmental, and social impacts and risks, further. This encourages
as well as the topics that are most important to your stakeholders. A double materiality businesses to consider
assessment is recommended if companies are required to align with CSRD. financial materiality, but
• This comprehensive approach will enable companies to prioritize actions and also how the company’s
communications that address the most material aspects of their business. activities impact society
• To streamline this process, companies can consult the Global Reporting Initiative (GRI) and the environment
sector standards, the Sustainability Accounting Standards Board (SASB) Materiality (outward impacts or
Matrix, and other high-level materiality navigators. impact materiality.)
• A company may also benchmark its competitors’ identified material issues. This is
because materiality is based on industry characteristics, local/regional considerations,
and shareholder structure.

Get the right stakeholders in place to kickstart your

company’s sustainability journey and reporting process.
 STEP
Measure Progress
2
Centralized Data Measurement
and Tracking System
• Guided by your material topics, companies can
identify relevant key performance indicators
(KPIs) and consolidate vital information and
data to gain a deeper understanding of their
business’ impact.
• These data points may encompass energy
use, water consumption, waste management,
GHG emissions, workforce metrics, board
composition, and more.
• With the growing demand for ESG disclosure
and multiple data points to track, this task
can become complex, particularly for large,
diversified companies with a global footprint.
In such scenarios, using a centralized and efficient ESG data collection, EcoStruxure Resource Advisor™
tracking, and reporting tool can be immensely beneficial. When selecting
the right ESG tool, it’s important to consider the following key features - With Resource Advisor all of your energy, ESG, and
sustainability data can live in one place, making
Degree of Flexibility: The tool should seamlessly integrate with and aid visualization, reporting, and confident decision making
in improving existing processes by fostering collaboration across the easier than ever before. Select from thousands of existing
business, without adding the burden of inputting ESG information into yet data streams or create custom data streams unique to
another platform. your strategy.
Speed and Ease of Delivery: Irrespective of the company/supplier’s Additionally, you’ll be supported on your net zero
ESG maturity, the tool should streamline operations by recommending journey by tapping into Schneider Electric’s network of
standardized KPIs from common reporting frameworks, enabling sustainability experts around the globe, who make your
companies to learn from best practices, simplifying data comprehension, goals their purpose.
and performance benchmarking.
Data Traceability and Verification: The tool should help identify and
address errors or discrepancies in sustainability data, leading to improved
accuracy and reliability, thus ensuring assurance in reporting.
Communication and Facilitation: The tool should serve as a central
repository for all ESG indicators, allowing greater access to data and
performance information across the company, and translating collected
data into meaningful insights and actions.

We can help you accurately collect, manage and report data

to all stakeholders inside and outside of your organization.
 STEP
Communicate Progress
3
Communication is Key
• Develop a sustainability/ESG report to provide your stakeholders a What is a Sustainability/
comprehensive view of your sustainability programs, goals, data, and
overall performance. ESG Report?
• Communication doesn’t end after your first report. Most stakeholders • A sustainability/ESG report communicates
expect companies to release a report each year that covers performance a company’s ESG performance, data,
from the prior fiscal year. initiatives, and impacts to its stakeholders,
typically from the last fiscal year.
• Identify and address gaps in data, disclosure, or materiality that must be
filled to mature your sustainability report in future years. • These reports can encompass various topics,
spanning from talent management to climate
• To ensure your sustainability communications are reaching all critical change. Companies often conduct materiality
stakeholder groups, consider other channels for sharing your progress assessments to identify these crucial
– including a dedicated sustainability webpage, social media posts, reporting topics.
excerpts in your 10-K and Proxy Statement, and more.
• A sustainability report is expected to be
aligned with global/regional reporting
frameworks, standards, or regulations.
Frequently referenced frameworks and
standards include, but are not limited to, GRI,
SASB, TCFD, IFRS S1 and S2, and United
Nations Sustainable Development Goals
(UN SDGs).
STEP 3 - Communicate Progress - Continued
Greenwashing 101
Consider these globally accepted frameworks for your sustainability reporting – Greenwashing is the practice of
conveying a false or misleading
• GRI is one of the most widely accepted voluntary sustainability reporting standards impression about a company’s
in use that captures a broad range of information that describes a company’s holistic products, services, or overall ESG
performance on ESG issues. performance, suggesting they are
• As a company matures in its ESG program, the organization will want to capture the more sustainable than they actually
attention of investors, and SASB is specifically designed to respond to investor needs are. This may be inadvertently
with sector-specific standards. It’s worth noting that GRI is also in the process of employed to meet the growing
developing various sector-specific standards. demand for ‘green solutions,’ and
a trend our team is continuing to
• The International Financial Reporting Standards (IFRS) Foundation’s International carefully monitor.
Sustainability Standards Board (ISSB) published its inaugural standards – IFRS S1
and S2 in 2023 with the aim of providing consistent and comparable information to Our experts can help mitigate your
investors globally. The same foundation has also taken over Task Force on Climate- risk of exposure by conducting
Related Financial Disclosures (TCFD), another popular investor-focused standard for
a greenwashing vulnerability
disclosing climate-related risks and opportunities.
assessment of your existing
• CDP (formerly the Carbon Disclosure Project) has been instrumental in enabling communications, offering tailored
investors and customers to request a company to disclose its environmental greenwashing training for your
information through questionnaires designed for climate, water, and deforestation,
business, and developing your
depending on your material impact. And let’s not forget the mounting pressure to
achieve high CDP scores, which serve as a key reflection of a company’s disclosure sustainability report.
and environmental performance.

Partner with us to navigate this complex landscape while advancing sustainability goals.
STEP 3 - Communicate Progress - Continued

Fulfill Your Compliance Requirements Simultaneously

There is no doubt that companies are facing mounting pressure • Multiple exchanges worldwide mandate the disclosure of ESG
from customers, investors, suppliers and many more to take climate information through annual sustainability/integrated reports. For
action and reduce emissions across their value chains. This pressure instance, the Singapore Exchange mandates the release of an
is compounded by several countries publicly committing to achieve annual sustainability report based on TCFD recommendations.
carbon neutrality, leading to a notable increase in sustainability
reporting requirements set by regulators. Some of the • The SB-253: Climate Corporate Data Accountability Act and
requirements include: SB-261: Climate-Related Financial Risk Act passed in the
state of California now require certain companies to publicly
• Several major countries, including Australia, Canada, Hong Kong, report on their Scope 1, 2, and 3 emissions, as well as disclose
Japan, Nigeria, Singapore, and the UK, have shown interest in their climate-related financial risks in accordance with the
adopting the ISSB standards. TCFD recommendations.
• EU-based companies subject to the CSRD must report according • The U.S. Securities and Exchange Commission’s ruling
to the European Sustainability Reporting Standards (ESRS), (currently on pause) requires SEC-registered domestic or foreign
which aligns with the EU Sustainable Finance Disclosure Regulation companies to disclose if Scope 1 and 2 emissions are material, the
(SFDR), EU taxonomy, GRI, ISSB, TCFD, CDP, and the EU’s ‘Green management and oversight of material climate related risks and the
Claims Directive. financial impact of climate related factors on the business.

Sustainability reporting serves as a vehicle to communicate your sustainability commitments and achievements.
 STEP
Strive for Continuous Improvement
4
Set Targets
• As your ESG program matures, it’s important to consider setting both near-term (5-10 years)
and long-term goals and targets. This can include establishing net zero emissions by 2050
and a clear roadmap to reach these milestones.
• This entails implementing emission reduction strategies and committing to renewable energy
procurement targets, ensuring that your business integrates ambition into its ESG initiatives.
• To enhance the credibility of these targets, validation through Science Based Targets
initiative (SBTi) is crucial. SBTi is a non-governmental organization providing specific
guidance and verification in organizational emissions reduction and net zero goals.
• Equally vital is the establishment of robust objectives pertaining to social and governance
criteria, encompassing areas such as worker health and safety, diversity and inclusion, and
community engagement.

By disclosing this information, your company

reaffirms its dedication to holistic sustainability.
How Businesses can Prepare
Here is a checklist for every corporate sustainability report at any level of maturity

Strategy and Commitment Programs and Initiatives

This pertains to the ESG goals and objectives set by the company This includes the actions, steps, and roadmaps charted by the company
that steer initiatives and guarantee enhancement of the company’s to achieve its ESG commitments and the validation obtained by external
ESG performance. This includes: third parties:
 ESG targets such as emissions reduction, net zero targets, SBTi  Action planning/Roadmaps such as renewable energy targets
validation, etc. and initiatives
 Materiality and ESG risk assessments  Environmental and Social Management Programs
 ESG board oversight  Management system certifications such as ISOs
 Alignment with globally accepted frameworks such as GRI, SASB,  Awards and recognition
TCFD and meeting regulatory requirements like the EU CSRD, US
SEC, etc Stakeholder Engagement
This is associated with the collaboration both inside and outside the
Codes and Policies company to understand and address business impacts such as:
This relates to the company’s codes and policies that help embed  Industry collaborations and membership
ESG into business strategies and processes such as:  Value chain engagement on ESG matters
 Codes of Conduct or Ethics (customers, suppliers, employees)
 Supplier Code of Conduct  Community relations and corporate giving
 Environment, Health, and Safety Policy
 Steps taken for company-wide deployment of various codes
Disclosure
and policies This refers to the frameworks and standards, such as GRI and SASB,
which provide report information. Sustainability disclosures that
correspond with report information are typically detailed in a report
index. Disclosure includes:
 Qualitative information such as a company’s management approach to
material topics
 Quantitative data such as greenhouse gas emissions and diversity
How Schneider Electric can Support
Wherever your company is on its sustainability journey,
we can produce reports you can publish with confidence.

Existing ESG reporting, Early-stage Fully managed Sustainability marketing and

reviews, and editing ESG report creation ESG reporting communications support

Identify the gaps in your New to ESG reporting? Rely on our expertise to Work with our team to
existing ESG reporting and We can get you started develop a technically accurate develop a sustainability
provide recommendations with a lighter lift service. and framework-aligned web page, craft authentic
for improvement. ESG report. product marketing and more.
Partner with a Trusted Advisor

Project Management and Consultation

We can support you each step of the way. Report projects often require a
dedicated resource to gather input from numerous company departments,

ESG/sustain-
leadership, and the Board. We ensure the project runs smoothly, and the final
deliverable is a high-quality report.

Writing and Framework Alignment

We can write the full report, which can range anywhere from 10 to 100+ pages ability reporting
long. This includes preparing disclosure within a reporting index that is aligned
to standards such as GRI.

Information Gathering and Strategy

We identify and gather report information through subject-matter-expert
interviews, benchmarking, and gap analyses, as well as review of company
documentation and reporting frameworks. We then develop a content outline
that we circulate for your review.

Report Launch Communications

Our team can help you announce the release of your report through press
releases, website, social copy, and executive talking points. These are added
services that help ensure the report reaches its intended audience.
Leading by Example in Our Ecosystem

At Schneider Electric, we walk the talk.

Sustainability is at the core of Schneider Electric. For over 20 years, Schneider Electric’s
Sustainability Business has been on a deep transformation journey, propelling it to emerge
as a global leader in sustainability. With a consistent top-ranking in ESG ratings for over a
decade, Schneider Electric plays a pivotal role in facilitating accelerated energy efficiency
and sustainability for its customers, suppliers, and partners.

1 Schneider Electric is named the world’s # 1 most sustainable company

by Time Magazine and Statista.

2 Schneider Electric continues to lead the way in external ESG ratings,

13th year in a row in DJSI and Global 100
3 Guidehouse Insights #1 ESCO

4 Verdantix’s Green Quadrant: Energy Management Software 2023

5 MSCI ESG Ratings (AAA since 2010)

6 CDP Gold Accredited Partner and Climate A List Member
7 Bloomberg Gender Equality Index (Included since inception in 2018)
8 Most Ethical Company since 2012 (Ethisphere)
Conclusion
The influence of sustainability reporting frameworks, ratings, rankings, and regulations is
broadening at an all-time high, unseen in preceding times, with a wider range of stakeholders
using this information to guide their investment decisions and supplier choices. As the See examples
sustainability landscape rapidly evolves and reporting frameworks mature, corporate
sustainability reporting is anticipated to continue growing, becoming increasingly essential. from our team
This trend is amplified by the tightening or introduction of regulations, such as the EU CSRD,
California Climate Bills, as well as the SEC’s Climate Disclosure Rule.
in action.
While the prospect of a universal reporting framework remains uncertain, it is clear that any
such scheme will likely align with existing dominant global standards. For instance, this may
entail ISSB taking over or harmonizing with other prevalent standards such as GRI, TCFD,
SASB, and CDP, streamlining the reporting process for companies and their sustainability
initiatives. As the industry evolves its standards, our team is there to monitor and advise
alongside our clients.
Proactively understanding these regulations and frameworks and adhering to best practices for
sustainability reporting will prove beneficial for companies across various industries and sizes
in the long run.

For more information, please contact us

© 2024 Schneider Electric. All Rights Reserved. Life Is On | Schneider Electric and EcoStruxure are trademarks and the property of Schneider Electric SE, its subsidiaries, and affiliated companies.