The FRC has today published an FRC Statement of Intent on Environmental, Social and Governance (ESG) challenges. This paper sets out areas in which there are issues with ESG information if companies are to report in a way that meets the demands of stakeholders, how to address some of these demands and the FRC’s planned activities in this area.

With information relating to ESG aspects of a company’s sustainability becoming more significant, the underlying data systems, and the data that supports reporting, pose a challenge, the FRC Lab report stated. Although investors, governments, and wider stakeholders call for expanded disclosure, the maturity of the systems that produce the information is significantly less sophisticated than for financial information. These challenges need collaborative solutions if ESG information is to be useful to stakeholders and provide them with consistent and comparable information.