Host: Nawar Alsaadi, Founder and CEO of Kanata Advisors, Chief Advisor at ED4S Guest: Marie-Josée Privyk (MJ), Founder of Fincom Services, ESG Reporting Expert

Episode Focus: An in-depth discussion on the evolving landscape of ESG reporting, its importance, challenges, and best practices for companies.

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Key Takeaways:

1. Importance of ESG Reporting: - ESG reporting is vital for meeting stakeholder demands—investors, customers, governments, and employees increasingly want transparency on companies' material environmental, social, and governance issues. - ESG considerations are integral to business management, translating into better risk management and long-term financial performance.

2. Stakeholder Expectations: - Stakeholders are not just investors but can include large customers, local communities, and regulatory bodies. - Reporting on ESG issues helps companies manage risks related to climate, regulations, and reputation, ultimately enhancing valuation and access to capital.

3. Challenges in ESG Reporting: - Maturity Spectrum: Companies vary widely in their ESG maturity. A lack of understanding often leads to delays or “check-the-box” compliance instead of meaningful engagement. - Resource Allocation: Insufficient resources remain a common hurdle. For effective ESG integration, there needs to be more investment in people, technology, and processes. - Misconceptions about Reporting: Treating reporting as a one-time or standalone task, rather than as a continuous and integrated business practice, limits its effectiveness.

4. Best Practices for Effective ESG Reporting: - Standardization and Comparability: Follow a recognized standard for reporting, clearly define scope, context, and performance over time. - Integration with Financial Reporting: Align ESG and financial reports to provide a complete picture of corporate performance. - Clear Communication of Material Issues: Explain why specific ESG issues are relevant and how they impact the business. Setting and tracking targets further enhances credibility.

5. Global ESG Regulation Trends: - Europe is leading with comprehensive initiatives, such as the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), which set a new standard for mandatory, standardized, audited, and digitized disclosures. - The International Organization of Securities Commissions (IOSCO) and the IFRS Sustainability Disclosure Standards are gaining global traction, with many countries likely to adopt similar frameworks soon.

6. Canadian Regulatory Landscape: - Canada is advancing with federal regulations on climate and labor disclosures. The Canadian Sustainability Standards Board is working on standards aligned with global frameworks, potentially set for implementation by 2026.

7. Future of ESG as a Management Tool: - ESG reporting is not just a compliance exercise; it should serve as a management tool for companies to identify, manage, and measure performance on material ESG issues. - Companies embracing this approach are better positioned to create long-term value and resilience.

8. Fincom Services’ Role in ESG: - MJ’s company, Fincom Services, helps companies navigate ESG reporting requirements, develop practical reporting frameworks, and use ESG insights as a foundation for better decision-making. - The goal is to make ESG reporting accessible and valuable for companies of all sizes, emphasizing a shift towards viewing it as a tool for sustainable business management.

Conclusion: This episode emphasizes that effective ESG reporting goes beyond compliance. It requires a strategic approach, sufficient resources, and integration with financial data. By adopting global standards, companies can achieve meaningful transparency, better risk management, and long-term sustainability.