Disclosures in ESG Management
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Summary of Disclosures in ESG Management
ESG disclosures involve companies providing information about their environmental, social, and governance performance. This practice promotes transparency, accountability, and informed decision-making among stakeholders. Users with thesnesg.reportingdisclosuremanagerrole manage these reports within the ESG Workspace.
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Disclosure Requirements
Disclosure requirements outline the obligations organizations must meet when preparing ESG reports. These requirements are often dictated by external regulatory bodies and are classified into:
- Authority Document: A framework that defines what to report, e.g., GRI, SASB, and CSRD.
- Citations: Specific reporting requirements within authority documents that organizations must address.
Importance of ESG Disclosures
ESG disclosures serve critical functions, including:
- Transparency and Accountability: They enhance stakeholder trust by clearly communicating performance.
- Risk Management: Disclosure helps identify and mitigate risks linked to ESG factors.
- Investor Decision-Making: Investors use ESG disclosures to evaluate sustainability and ethical practices.
- Corporate Reputation: Positive disclosures can enhance brand value, while poor practices may harm reputation.
- Regulatory Compliance: Adhering to regulations prevents legal consequences.
- Stakeholder Engagement: They facilitate communication and foster better relationships with stakeholders.
Narrative Disclosures
With version 18.0.3, new users can create narrative disclosures using Microsoft 365 for ServiceNow. These disclosures can be stored on Microsoft SharePoint or locally. Collaboration is enabled, and templates for different types of disclosures can be defined. An automatic email alerts data owners about changes requiring document refreshes. Multiple approvers are needed for disclosure approval, and secondary documents may be attached to enhance the disclosure.
Next Steps
- Create Disclosure Templates: Develop unique Microsoft Word templates for various disclosures to improve consistency.
- Create and Store Disclosures: Generate narrative disclosures for your organization to be stored on SharePoint or locally, edit them, and upload them back into ESG Management.
- Add Supporting Documents: Include secondary documents, such as sustainability reports and governance documents, to enrich disclosures.
- Add Metrics: Incorporate relevant metrics to enhance the disclosure data.
- Create Authority Documents and Citations: Use ESG Workspace to establish authority documents and citations for regulatory compliance.
An ESG disclosure refers to the practice of companies and organizations providing information and reports on their environmental, social, and governance (ESG) performance. These disclosures are designed to offer insights into how a company manages and addresses various ESG-related issues. Users with the sn_esg.reporting_disclosure_manager role are responsible to manage the disclosure reports.
Disclosure requirements
- Authority document
- An Authority Document is a regulatory framework or standard that outlines what an organisation should report in its ESG disclosures. It acts as a reference point for compliance and reporting. Examples include: GRI (Global Reporting Initiative), SASB (Sustainability Accounting Standards Board), and CSRD (Corporate Sustainability Reporting Directive).
- Citations
- Citations are the individual reporting requirements or metrics defined within an authority document. They represent the specific items an organisation must disclose. Each authority document can have multiple citations, forming a one-to-many relationship. These citations are what the organisation responds to in its ESG report, often with quantitative or qualitative data.For example from GRI: “Energy consumption from renewable sources” and from SASB: “Total energy consumed (TCSI 220)”.
Importance of ESG disclosures
- Transparency and accountability: ESG disclosures enhance transparency, allowing stakeholders such as investors, customers, employees, and the public to understand a company's performance in key ESG areas. This transparency fosters accountability and trust.
- Risk management: Companies that disclose ESG information can better identify and manage potential risks associated with environmental, social, and governance factors. This is crucial for long-term sustainability and resilience.
- Investor decision-making: Investors are increasingly considering ESG factors in their decision-making processes. ESG disclosures provide investors with information to assess a company's sustainability, ethical practices, and long-term viability.
- Corporate reputation: Positive ESG performance can enhance a company's reputation and brand value. Conversely, poor ESG practices can lead to reputational damage, affecting customer and investor confidence.
- Regulatory compliance: In some regions, there are regulatory requirements for companies to disclose ESG information. Compliance with these regulations is essential to avoid legal and financial consequences.
- Stakeholder engagement: ESG disclosures facilitate communication with various stakeholders by demonstrating a company's commitment to responsible business practices. Engaging with stakeholders on ESG issues can lead to improved relationships and collaboration.
Narrative disclosures
Starting with version 18.0.3 all new users of ESG Management have access to only narrative disclosures. Narrative disclosures refer to disclosures that are created using the Microsoft 365 for ServiceNow Reporting add in. When you create a narrative disclosure, you have the option to store the disclosure either on Microsoft SharePoint or on your local system. Microsoft SharePoint integration in narrative disclosures is available for ESG Management version 18.0.3 and the Xanadu release. The document that is generated when you create a narrative disclosure can be opened using Microsoft Word and the data points that are configured can be inserted in the document using the ServiceNow Reporting add-in. If there is any change in the data that is inserted, an email is automatically sent to the owners of the disclosure data notifying them that the data has changed and that they must refresh the Microsoft Word document.
In a narrative disclosure, multiple collaborators can contribute to create the disclosure. You can also define templates for each type of disclosure report. Refer to Types of disclosure reports to understand each report type. Each disclosure can be approved by one or more approvers.
When generating a disclosure, it is important to note that the automatically generated document is considered the primary document. Additionally, you have the option to attach secondary documents as part of the disclosure process.
To create narrative disclosures on remote storage, you must install and activate the sn_docs_onedrive plugin.
- Setup Microsoft OneDrive for Document Services
- Connecting to Microsoft Sharepoint [KB1646310] article in the Now Support Knowledge Base.
You can download the disclosures in an Excel format from the overview tab in the ESG Workspace.
Additional information about disclosures
The following list provides detailed information about disclosures.