ESG Disclosure  
Handbook

2 ESG Disclosure Handbook

ESG Disclosure Handbook 3
Contents
1. Foreword
4
2. ESG Disclosure Handbook – Purpose and objectives
5
    Introduction
5
    What is the ESG Disclosure Handbook and who is it for?
5
    Why is this handbook needed?
6
    How to use the handbook
7
    Structure of the handbook
8
    How the handbook fits into the corporate reporting landscape	
8
3. Process overview
10
4. Key questions
11
    Key question 1: why report ESG information?
11
    Key question 2: for whom should ESG information be reported?	
13
    Key question 3: where should ESG information be reported?
15
    Key question 4: what ESG information should be reported?
16
    Key question 5: how should ESG information be prepared and presented?
18
    Key question 6: how much ESG information should be reported?
20
5. Steps in the evaluation process
24
    A: Evaluate
24
    B: Decide
26
    C: Document
26
6. Handbook checklist
28
7. Endnotes
29

4 ESG Disclosure Handbook
1.	Foreword
The burgeoning interest in corporate environmental, 
social and governance (ESG) information from investors, 
society, central bankers and others has led to welcome 
developments in reporting frameworks, codes, rules and 
practices. The Reporting Exchange records almost 2,000 
reporting provisions and other resources that directly or 
indirectly affect the way in which companies report on 
ESG matters. While these developments are welcome 
responses to the challenges of our times, they also mean 
that companies are facing many choices when deciding 
what ESG information to report, how, to whom and where.  
The Corporate Reporting Dialogue (CRD) brings together 
some of the most influential developers of ESG reporting 
frameworks and standards. The CRD is a response to 
market demand for greater coherence, consistency and 
comparability between different frameworks. Members 
are committed to driving better alignment of sustainability 
reporting frameworks, as well as with frameworks that 
promote further integration between non-financial and 
financial reporting. 
As Chair of the CRD, I welcome the ESG Disclosure 
Handbook. It is a valuable resource for companies aiming 
to evaluate the way in which they may use different 
reporting frameworks and standards to achieve effective 
and purpose-driven disclosure. The handbook adopts 
relevant principles from the professional frameworks that 
accountants use when making and assessing significant 
judgments and providing useful input into ESG disclosure 
decisions. 
By providing a structured evaluation process, the ESG 
Disclosure Handbook makes an important contribution to 
enhancing ESG disclosure.  
Ian Mackintosh, Chair, Corporate Reporting Dialogue

ESG Disclosure Handbook 5
2.	ESG Disclosure Handbook 
purpose and objectives
Introduction
Many considerations affect the decisions companies 
make about what environmental, social and governance 
(ESG) information they report as well as how and where 
they should report the information and for which 
audiences. The regulatory and societal context in which 
the company operates, its stakeholders, ethical choices 
and values and other factors influence the choices 
about what to report. The absence of universally agreed 
objectives, standards and thresholds for external ESG 
information disclosure means that reporting takes place 
against a background of uncertainty. Risks can arise from 
the failure to satisfy stakeholders’ information needs, 
perceptions of lack of accountability and disconnects 
between information reported through different channels. 
Companies therefore adopt various approaches to ESG 
reporting in practice. These include:
•	Publishing multiple reports aimed respectively at 
particular subject matter, themes, objectives or 
framework requirements; 
•	Integrated reporting that aims to cover all subject matter 
materially relevant to performance and value creation, 
including increasing the presentation of ESG information 
alongside financial statements and management 
commentary;1
•	Hybrid approaches based on a range of influences, 
including reporting requirements, internal objectives, 
peer practice and/or targets for inclusion in indices. 
All of these approaches are legitimate responses to the 
demand for ESG information. However, in many cases it  
is difficult for users of information to discern why 
a company has taken a particular approach, what 
assumptions inform conclusions about the ESG 
information reported, and what purpose and audience  
the information intends to serve.
What is the ESG Disclosure Handbook 
and who is it for?
The ESG Disclosure Handbook offers guidance to help 
companies navigate choices associated with ESG 
reporting, including:
•	The ESG information needs of multiple stakeholders;
•	Multiple reporting provisions (see Box 1);
•	Internal objectives for reporting;
•	External objectives for reporting (e.g., measuring  
impact, compliance, etc.);
•	Concerns about reporting “volume and clutter” 
obscuring important information.
The guidance in the ESG Disclosure Handbook is 
designed for use by companies when considering what 
to report, where, why, to whom and how in response to 
non-prescriptive mandatory ESG reporting requirements 
(see Box 1), voluntary ESG reporting requirements and 
corporate ESG reporting objectives. The guidance is a 
structured evaluation process to help companies address 
the multiple considerations that inform external ESG 
reporting decisions. The structured evaluation process is 
made up of six key questions and three process steps as 
described in sections 4 and 5.

6 ESG Disclosure Handbook
Why is this handbook needed?
Decisions about the type of ESG information to report 
as well as why and how companies should prepare the 
information, where they should report it and for whom,  
are based on the evaluations and judgements 
management makes when assessing the different  
options available to them. 
As ESG reporting requirements evolve, become more 
complex and add new features, such as the demand for 
forward-looking, investor-grade information, companies 
will increasingly need techniques to respond to new 
reporting challenges. The ESG Disclosure Handbook 
provides a structured process to exercise judgement 
when forming balanced and supportable opinions about 
the options and inputs available during the ESG reporting 
decision-making process. 
Judgement is not the same as decision-making. 
Judgement is a skill that applies where there is more than 
one potentially correct answer. Judgement leads to the 
forming of opinions and is a subset of decision-making. 
The objectives of judgement are to:
•	Achieve independence and help avoid biases; 
•	Support comprehensive fact-gathering 
and documentation; 
•	Evaluate different options; 
•	Limit errors and risks; 
•	Improve the quality of information through discernment; 
•	Support assurance activity;
•	Raise confidence in reported information; 
•	Enhance coherence between ESG and other  
corporate information;
•	Help the board and audit committees understand  
the options management is considering and the 
approach taken to reach decisions about external  
ESG information disclosure.
The accounting profession uses judgement frameworks 
to guide accountants and others when making, assessing 
and documenting significant judgements.2 
As ESG reporting adopts more of the characteristics of 
financial reporting and demands for transparency on 
the assumptions reporting companies make increase, 
professional judgement frameworks applicable to 
accounting provide useful input into ESG disclosure 
decision-making. 
Box 1: Reporting provisions:  
introducing the Reporting  
Exchange and the Indicator Library
A reporting “provision” is a legal/mandatory requirement or 
a voluntary framework, code or guidance document that 
“provides” details of what a company must do or could do 
to provide ESG information in external reports.
Legal/mandatory reporting provisions can be prescriptive – 
telling the reporting company exactly what they must  
do – or non-prescriptive. Non-prescriptive mandatory 
reporting requirements are legal requirements for the 
provision of general ESG information that do not prescribe 
the exact content. For example, Article 3.1 of EU Directive 
2014/95/EU requires certain companies to include a 
non-financial statement containing information relating 
to environmental, social and employee matters, respect 
for human rights, anti-corruption and bribery matters in 
the management report. However, it does not prescribe 
the exact content; therefore, companies have to use 
judgement and discretion about how to respond.
The Reporting Exchange and Indicator Library are 
resources designed to help companies understand and 
navigate ESG reporting provisions.
The Reporting Exchange (www.reportingexchange.com) 
is an online platform that records details of reporting 
provisions that directly or indirectly influence the way 
in which companies report ESG information. Reporting 
provisions are recorded on the Reporting Exchange where 
they are introduced, developed or can be interpreted to 
support ESG and sustainability reporting and non-financial 
disclosure requirements. 
Within the Reporting Exchange, the Indicator Library 
identifies certain indicators specified in some of the 
provisions recorded. The purpose of the Indicator 
Library is to organize, categorize and structure within a 
central resource some of the indicators that companies 
commonly use for external reporting. The way in which  
the Indicator Library organizes and structures provisions 
and indicators does not apply any value judgement as  
to the merits, relevance or usefulness of indicators –  
they are simply recorded according to an agreed 
categorization structure with full referencing back to  
the source of the indicator. 
The Reporting Exchange and the Indicator Library should 
be used in conjunction with the ESG Disclosure Handbook 
as a reference point for companies when exercising their 
judgement about what to disclose in external reports.

ESG Disclosure Handbook 7
How to use the handbook
Companies may use the handbook to:
•	Explore the various options associated with external 
ESG disclosure; 
•	Inform the development of a reporting strategy and 
external disclosure processes. A reporting strategy 
is a plan of action and a decision-making framework 
designed to achieve reporting objectives and ensure 
that information is “decision-useful.” It enables 
teams and people involved in the reporting process 
to understand and coalesce around the company’s 
strategic reporting approach. It is likely to include 
details of:
•	 Operational and organizational reporting boundaries;
•	 The standards and methodologies that the company 
will use to prepare ESG information;
•	 Third party or company-created definitions of ESG 
terminology;
•	 The circumstances in which companies will seek 
external assurance;
•	 The timescales over which companies will report 
information, including the company’s definition of 
short-, medium- and long-term;
•	 The perspectives from which the company will 
report information;
•	 Systems and internal controls for collecting ESG 
information; 
•	 Sign-off procedures for ESG information.
•	Work through the structured process outlined in  
section 3 and explained in more detail in sections 4 and 5;
•	Identify the most appropriate reporting provisions and 
indicators to use in conjunction with the Reporting 
Exchange and Indicator Library (see Box 1);
•	Take control of the company’s narrative within corporate 
reports to limit or balance opinions and conclusions 
reached by investors and others based on a variety of 
information sources;
•	Support collaboration, knowledge sharing and cross-
functional, interdisciplinary team discussions and/or 
regular meetings with professionals from finance, risk 
management, control and planning, investor relations, 
legal, sustainability and communications departments;
•	Understand more about user information needs;
•	Reference in external reporting to explain the approach 
used when preparing disclosures about judgement. 
Where management has used the handbook to guide 
decision-making on external ESG reporting, they can 
state that their ESG reporting decisions have been based 
wholly or partly (as appropriate) on the  
ESG Disclosure Handbook.
Investor information needs
The ESG Disclosure Handbook provides insights into 
the information needs of investors. The insights assist 
companies in the judgement process by clarifying the 
information characteristics that are useful to investors 
in their decision-making. The focus in this handbook on 
investor information needs recognizes that many large 
companies have mandatory (albeit non-prescriptive) 
obligations to report certain ESG information to investors 
and that investors have an important role to play in 
promoting long-term sustainable organizational success. 
An evaluation of all stakeholder interests and information 
needs is an important component in exercising 
judgement about what information is most material and 
decision-useful for investors.
The insights into investor information needs are based on 
interviews conducted with selected investors from APG, 
PGGM, Allianz Global Investors, Generation Investment 
Management, Arabesque Partners, Colonial First 
State Global Asset Management, Breckinridge Capital 
Advisors, Canada Pension Plan Investment Board, Aviva, 
S&P and MSCI. The selection of participants aimed 
to achieve broad geographical representation and to 
take into account the specialist ESG knowledge of their 
firms. The investor sample is small and therefore is not 
representative of views in the financial industry as a whole.

8 ESG Disclosure Handbook
Investors’ observations on the current 
state of ESG disclosures
Mixed progress depending on company size
ESG reporting has seen significant progress in terms of 
the number of companies reporting ESG information. 
Sustainability reporting is now standard practice for large 
and mid-size companies around the world. But it is far less 
common among small and mid-sized companies, certain 
sectors and geographies. Therefore, despite the progress, 
the availability and accessibility of ESG disclosures is still 
a concern. 
Improvement in content, differences in ESG  
subject matter 
The content of disclosures has improved significantly. 
Reporting companies have adopted frameworks and 
standards, which improves the comparability and 
quality of disclosures. Governance disclosures are most 
prevalent and robust, incorporated in annual reports 
and supported by codes and regulations. Environmental 
disclosures are gradually becoming more standardized, 
often presented in quantitative terms. However, there 
are significant differences in the quality of information 
depending on the subject matter. Greenhouse gas 
emissions information is well advanced, whereas 
information about topics such as biodiversity is less 
mature. Companies need to make the most progress in 
improving disclosures related to social matters, especially 
human rights issues. Investors often perceive human 
rights issues as a material risk influencing the reputation 
of the company and therefore require better information 
on how a company is mitigating associated risks. 
Scope
Disclosures about ESG risks and opportunities outside 
the company’s operational/organizational boundary are 
currently inadequate. 
Although companies have made progress on the 
availability and quality of ESG information reported, they 
need to make further improvements if investors are to 
integrate ESG analysis into their investment decisions. 
Investors are looking for financially material, forward-
looking, strategic information and request standardized, 
timely, verified data that they can use in their own models. 
Structure of the handbook
The ESG Disclosure Handbook covers:
•	Key questions that inform judgement (section 4);
•	The application of materiality (section 4); 
•	Investor information needs (section 4).
•	Evaluation steps (section 5). 
How the handbook fits into the corporate 
reporting landscape
The ESG Disclosure Handbook responds to the following 
drivers:
•	The complexity of the reporting landscape  
Reporting requirements are currently found in a mixture 
of regulation and legislation, standards, protocols, 
frameworks, codes, principles, guidance and listing 
rules.3 Regulators, the business community, investors, 
non-governmental organizations (NGOs), think tanks, 
ratings agencies and specialist reporting organizations 
develop the requirements. ESG reporting content – 
meaning the type of information requested in reporting 
requirements – shares some characteristics across 
requirements but there is not full alignment. 
•	New corporate performance expectations 
Sustainability “mega forces,” including climate change, 
energy security, resource scarcity, disparate levels of 
prosperity, food security and ecological decline, are 
changing notions of what constitutes business success. 
Businesses are being called on to create shared value 
and inclusive growth, to assess their dependencies 
and impacts on the range of “capitals”4 or resources 
and relationships from which they create value, and 
to contribute to the Sustainable Development Goals 
and account for how they do this in external corporate 
reports.
•	Emerging reporting trends  
ESG reporting is increasingly becoming an annual 
exercise for companies, and the financial sector is 
taking a more active interest. The involvement of 
finance ministers and central bank governors in the 
creation of the Task Force on Climate-Related Financial 
Disclosure (TCFD) signals a new impetus in making ESG 
reporting (or subsets thereof) a mainstream exercise 
with the characteristics of financial reporting. This in turn 
introduces new expectations, for more forward-looking 
information5 and for investor-grade information that is 
suitable for third-party assurance.

ESG Disclosure Handbook 9
•	Dangers of boilerplate reporting  
A recent study6 focused on risk factor disclosures found 
that analysts are better able to assess fundamental 
risk and reflect it in stock prices when disclosures are 
more detailed and avoid vague, abstract or “boilerplate” 
language. However, according to the Sustainability 
Accounting Standards Board (SASB) State of Disclosure 
Report, which reviews US 10-K and 20-F filings, 
companies used generic, vague and non-specific 
language more than 50% of the time across ESG topics.7 
•	Independent assessments of corporate ESG 
performance enabled by technology  
There is some evidence to suggest that third-party 
organizations are starting to form their own assessments 
of ESG performance and even prepare hybrid disclosures 
according to a pre-determined set of requirements based 
on information in the public domain.8,9
•	Demand for greater connectivity of information  
The International Integrated Reporting Framework 
and other reporting provisions encourage greater 
connectivity of information in order to reflect  
coherence between internal decision-making, 
management actions, performance management,  
risk management and external reporting.  
The TCFD recommendations, for example, highlight 
the relationships between climate-related issues/
impacts and financial impact, and make links to financial 
impact categories (e.g., assets, revenues, liabilities, 
capital expenditure). The final report from the TCFD also 
outlines some of the potential connections between 
established accounting standards and climate-related 
impacts.10
Figure 1 illustrates how the ESG disclosure judgement 
process fits into the wider external, corporate and 
reporting landscape. It recognizes that judgement on ESG 
reporting applies at the nexus of, and will be formed by, 
reference to: 
1. An assessment of the external context in which the 
company operates; 
2. Knowledge of the objectives the company has set 
through its strategy and familiarity with the internal 
processes and practices the company uses to support 
the achievement of corporate strategy and objectives;11
3. Requirements and practices relating to external ESG 
reporting and the needs of users of ESG information.
External disclosure
Users of 
information
other 
stakeholders 
Investors
External context (political, social, market, economic, technological)
Corporate strategy, 
objectives, internal 
processes
 and practices
Judgement
Figure 1: Judgement as a bridge

10 ESG Disclosure Handbook
3. Process overview
The ESG disclosure judgement process comprises 
three process steps (evaluate, decide, document) and 
six key questions (see Figure 2). The process steps and 
key questions offer a simple, clear and practical way 
of optimizing confidence in externally reported ESG 
information. The key questions are:
1. Why report ESG information?
2. For whom should ESG information be reported?
3. Where should ESG information be reported?
4. What ESG information should be reported?
5. How should ESG information be prepared  
and presented?
6. How much ESG information should be reported?
Answering questions 1 and 2 in order to determine 
why companies should report ESG information and for 
whom is the most crucial part of the ESG disclosure 
judgement process. Understanding the objective for ESG 
information and the needs of the intended audience helps 
to determine where companies should report information 
and provides management with two acid tests against 
which to evaluate the choices available for responding to 
questions 3 through 6 about where and what to report, 
how and how much. This is because companies should 
calibrate the content, preparation and presentation of 
ESG information to fit the objective of ESG disclosure, the 
report in which they disclose ESG information and the 
information needs of the intended audience. Therefore, 
companies should answer questions 1 and 2 before 
proceeding with the other questions. However, the 
questions are part of a dynamic process recognizing 
the interactions between the questions and process 
steps when making judgements about ESG information 
disclosure. 
The process steps are:
A. Evaluate options in a neutral, objective manner and 
according to a list of criteria designed to identify 
information that:
•	Supports the objectives and purpose of reporting
•	Has business value
•	Meets the needs of the primary intended audience(s) 
•	Is supportable
•	Can be clearly communicated
B. Decide relying on the evaluation process, assumptions, 
opinions and the subjective judgement of management 
and experts (if appropriate). 
C. Document the process and decision along with any 
uncertainties or sensitivities that affected judgement.
How?
For whom?
Why?
How much?
Where?
What?
A. Evaluate
B. Decide
C: Document
Figure 2: Key questions and steps

ESG Disclosure Handbook 11
4.	Key questions
This section provides guidance on approaching each of 
the six key questions. The guidance on each question 
follows the same format. First it explains the aim of the 
question. Then it considers the options available to 
respond to the question and, where possible, provides 
examples showing how selected organizations influence 
or respond to the range of options available for each 
question. Finally, where appropriate, it provides insights 
into investors’ information needs.
Key question 1: why report  
ESG information?
The aim of working through this question is to define 
one or more clear objectives for ESG information so 
that management can evaluate whether the information 
achieves its intended objective(s). 
The reasons for reporting ESG information will have a 
direct influence on its quality, quantity and characteristics. 
For example, information prepared for compliance 
purposes is more likely to be subject to verification or 
assurance procedures than information to communicate 
the reporting company’s voluntary commitments. 
Information reported in order to participate in ratings 
is more likely to be prepared according to third-party 
guidance than information describing the reporting 
company’s value creation process, which will be 
determined by management. Arguably, seeking to fulfil 
multiple objectives (and cater to multiple audiences  
(see question 2) in a single report can limit its usefulness. 
In simple terms, the reasons for a company to report  
ESG information might include:
•	They have to in response to compliance requirements; 
•	They want to in order to communicate important 
information to stakeholders;
•	They ought to in order to align with peer practice or 
contribute to policy goals.
Objectives that company management might wish to 
satisfy (other than for compliance reasons) include:
•	Explaining the effect of actual and expected ESG 
developments on the business; for example, how policy 
pronouncements, technology, resource depletion and 
market dynamics will affect the reporting company and 
its plans. This “outside in” or “dependencies” reporting 
objective explains how external ESG developments, 
including the quality and availability of resources on 
which the reporting company depends, affect its 
condition, performance and prospects.
•	Explaining the effect the reporting company expects to 
have on the environment, communities, markets, future 
generations, etc. This “inside out” or “impact” reporting 
objective explains how corporate activities impact the 
environment and society.
Whether from an outside in or inside out perspective, 
management’s reporting objectives might include:
•	Aligning with peer practice;
•	Participating in ratings, rankings and indices;
•	Communicating operational and resource efficiency 
targets and plans in response to ESG-related risks and 
opportunities; 
•	Communicating commitments to ESG-related goals 
whether at individual company level or through programs 
such as the UN Global Compact or to international 
commitments such as the Paris Agreement;
•	Communicating the company’s strategic aims 
for remaining resilient in a time of transition and 
transforming the business in response to ESG-related 
challenges;
•	Describing the company’s ESG-related risks and 
opportunities and the corporate response through 
mitigation and adaptation activities;
•	Explaining whether and how the company has integrated 
ESG issues into standard processes;
•	Explaining how the company will create long-term value 
through business model design and flexibility, financial 
capital investments, changes to assets and portfolios, 
and transformation programs.
Table 1 provides some examples of the reasons to report 
ESG information.

12 ESG Disclosure Handbook
Explore the possibilities
Gather facts and knowledge
Examples
Satisfy compliance 
requirements
Which requirements apply to the company?  
Is judgement required to respond to  
“non-prescriptive” requirements?
Directive 2014/95/EU on 
disclosure of non-financial and 
diversity information by large 
companies
Communicate progress 
against company 
commitments and strategic 
aims
What commitments or strategic objectives has 
the company made and communicated? What 
are the expectations and priorities of connected 
stakeholders who can help or hinder progress 
towards strategic aims?
Eni 2017-2020 Strategic Plan 
targets
Describe how the company 
creates value
How does the business model take inputs from the 
various types of capital and transform them through 
business activities and interactions to produce 
outputs and outcomes that create value?
BT Group Integrated Report
Describe drivers of long-
term value
How does the company manage value drivers 
across a range of capitals in order to support long-
term value and long-term performance, prospects 
and position?
Olam Integrated Report
Report contribution to 
international commitments 
such as the Sustainable 
Development Goals (SDGs), 
Paris Agreement, Aichi 
Biodiversity Targets
Which SDGs are important to the business? Where 
does the company have the biggest impact? Where 
are the opportunities?
Committed to the United 
Nation’s Sustainable 
Development Goals Linking 
95% of Philps revenues to SDG 
3 and SDG 12
Align with peer practice
What information are other companies publicly 
reporting? Those in similar sectors/industries? 
Geographies?
Cement Sector Scope 3 GHG 
Accounting and Reporting 
Guidance
Participate in ratings and 
indices
Are key stakeholders using ratings and indices? Is 
participation of strategic or reputational importance?
Dow Jones Sustainability Index
Respond to stakeholders, 
NGOs and societal 
expectations
Have NGOs and stakeholders received specific 
requests or has the company committed to 
responding to stakeholder feedback?
Palm Oil Responsible Sourcing 
at Nestlé
Table 1: Examples of the reasons for reporting ESG information
Investor insights
In general, the reporting objectives best suited to 
investor needs are those that focus on the way in which 
companies integrate ESG factors into their strategies and 
manage ESG risks and opportunities to support resilience, 
growth and long-term value creation. “Key question 4: 
what ESG information should be reported?” outlines 
the specific type of information of particular interest to 
investors.

ESG Disclosure Handbook 13
Investors
Customers
Academia
Suppliers
Competitors
Media
Employees
NGOs
Regulators
Audiences
Figure 3: Potential audiences for ESG disclosures
Key question 2: for whom should ESG 
information be reported?
The aim of working through this question is to identify 
the primary audience(s) for ESG information so that 
management can evaluate whether ESG information 
satisfies the information needs of the intended 
audience(s). Just as the reason for reporting ESG 
information affects its characteristics (see key question 
1), the intended audience for ESG information affects 
what companies report and deem to be material. 
Therefore, identifying the intended audience enables 
management to evaluate what is most useful for their 
needs and to determine the most material information for 
reporting to that particular audience.
Stakeholders groups include:
•	Internal stakeholders, including employees (e.g., BHP 
Billiton Sustainability Report12); 
•	External stakeholders, including government and society 
(e.g., BMW Group Sustainability Report13);
•	Connected stakeholders, including investors and 
shareholders (e.g., DSM Annual Report14). 
Figure 3 illustrates the different potential audiences for 
ESG disclosures.
When exploring disclosure options and possibilities for a given 
stakeholder or stakeholder group, companies may consider a 
number of different relationships and connections:15
1. Responsibility: legal, financial and operational – 
regulation, contracts, policies, etc.; 
2. Influence: able to influence license to operate and the 
ability of a company to meet its goals; 
3. Proximity: most interaction, internal stakeholders, long-
standing relationships, day-to-day operations, etc.;
4. Dependency: employees and families, customers 
dependent for safety, livelihood, health or welfare, etc.; 
5. Representation: representatives through regulatory 
structures, unions, membership organizations, etc.
A wide range of groups – NGOs, special interest groups, 
regulators, consumers, local communities, ratings agencies, 
etc. – may produce and use external ESG information. 
Companies may use the judgement process to inform 
the external disclosure of ESG information to a range of 
groups. However, disclosures are likely to be clearer and 
more understandable where they identify information for 
the primary or significant audiences and distinguish it from 
information intended for other audiences. Companies 
should therefore use the judgement process to identify and 
distinguish the “primary” or “significant” audiences from the 
various stakeholder groups.16

14 ESG Disclosure Handbook
Investors’ common and differentiated needs
In principle, all investors face similar challenges and 
consider similar issues, such as analyses of risk, including 
country, industry and policy risk, together with the 
assessment of competitive position, management quality, 
cash flow, financial returns and balance sheet strength. 
However, strategies to address these issues can differ 
depending on the investor type, their remit, the time 
horizons of their investments and the portfolio mix.  
There is no single type of investor. For example:
•	Some long-term investors assess each (potential) 
investee company in a unique way, sometimes over 
a period of months, involving detailed research into a 
specific sector and/or company focusing on a range of 
information sources, such as news, speeches, financial 
and ESG performance, etc.
•	Sell-side analysts may be more interested in the short-
term performance of investee companies, capital 
discipline, increasing free cash flow, lowering costs and 
maximizing efficiencies.
•	Buy-side analysts may take a longer-term view, seeking 
key strategic and operational differentiators and alpha 
potential.
•	Others, such as “quant investors,” use raw data for their 
quantitative analysis and have more interest in real-time, 
comparable quantitative data.
•	Information needs could also differ between 
departments within the same investment company. 
Listed equity investors, for instance, need different 
information than credit analysts, with the latter often 
using specific criteria related to risk profiles, scale, 
profitability, leverage and coverage.
•	Most responsible investors use some form of screening/
filter/weighting/tilting strategy to avoid or mitigate 
specific ESG risks, such as reputational damage. 
However, some are now integrating ESG into their 
analyses, in order to identify positive impacts from 
contributions to the SDGs and to understand the effect 
a company has on the environment, communities, 
development, etc. 
•	Furthermore, investors’ information needs can differ 
by region, responding to regulatory developments and 
support, or cultural differences. 
Although there is no single type of investor, the guidance 
in the following questions (3 – 6) provides insight into 
where they have common information needs.

ESG Disclosure Handbook 15
Key question 3: where should ESG 
information be reported?
The aim of working through this question is to evaluate 
the most appropriate reporting channel(s) for reporting 
ESG information.
The reporting channel should align with the objectives 
the information seeks to achieve and the information 
needs of the intended user(s). For example, information 
about investment in activities or products designed to 
achieve long-term sustainable outcomes is more suited 
to disclosure in an investor-focused reporting channel 
than information about participation in or contributions to 
community projects. 
There are many different channels and routes for external 
ESG information reporting. The Reporting Exchange 
identifies the following:
•	Mainstream report – The annual reporting packages 
organizations must deliver under the corporate, 
compliance or securities laws of the country in which 
they operate, in order to provide information to existing 
and prospective investors about the financial position 
and performance of the organization. They generally 
contain financial and governance statements and 
management commentary.
•	Integrated report – An integrated report explains to 
providers of financial capital how an organization creates 
value over time. An integrated report aims to provide 
insights into the resources and relationships used and 
affected by an organization – known as “the capitals.”  
It also seeks to explain how the organization interacts 
with the external environment and the capitals to create 
value over the short, medium and long term.
•	Sustainability report – A report published by a company 
or organization about the environmental and social 
impacts caused by its everyday activities and to 
communicate sustainability performance and impacts.
•	Specialist system – For example, online response 
systems or targeted questionnaires.
Reporting channels that investors commonly use
Investors use many different sources of information when 
assessing the implications of ESG factors on a company’s 
condition, performance and prospects. However, in 
general, investors rely on sources of information that 
reflect both financial and non-financial information, such 
as mainstream or integrated reports and capital market 
day presentations, containing the information listed in key 
question 4 under “investor information needs.” 
Route/channel
Example
Topic-specific reports 
Eni Path to Decarbonization 
Data portals 
Salesforce Interactive Analyst Center 
Fact sheets
Danone At A Glance – Facts & Figures
Management presentations 
Shell Management Day
Investor/analyst presentations 
Yara Capital Markets Day
Social media 
Nestle social media 
Media releases 
Olam International Secures Asia’s First 
Sustainability-linked Loan  
Website articles/blogs
Trust: the key that will unlock progress
Web content 
H&M's Human Rights Policy 
Speeches
Syngenta Chairman’s speech
Videos
Solvay in video
Table 3: Reporting channels companies have used to communicate ESG information

16 ESG Disclosure Handbook
Key question 4: what ESG information 
should be reported?
The aim of working through this question is to evaluate 
the content options available for ESG information. 
Deciding what ESG information to report depends on 
the objective of the information and/or the corporate 
report, the requirements specified in the reporting 
provisions management has adopted and the intended 
users of/audience for information. Within the universe of 
possibilities to meet the information objectives, reporting 
requirements and audience needs, there is some 
coalescence around the:
•	ESG subjects about typically requested information –  
the Reporting Exchange provides a list;17 
•	Commonly reported ESG information categories,18  
as follows:
•	 ESG-related risks – internal risk from the 
organization’s business activities and/or external 
risks from the external environment;
•	 ESG-related opportunities – internal and external 
opportunities afforded by, for example, new 
challenges and the development of new products 
and services; 
•	 Management – actions, schemes, projects, 
resources, targets and initiatives to generate and 
preserve value for the company and stakeholders;
•	 Governance – organizational oversight of ESG 
strategy, policies and information;
•	 Strategy – identifying strategic objectives, managing 
risks and maximizing opportunities;
•	 Targets – objectives or results towards which 
companies direct their efforts, including timelines, 
key performance indicators and objectives;
•	 Performance – that supports the business strategy 
and sustainability outcomes.
The type and characteristics of ESG information a 
company reports depends on decisions made about:
•	The type of information the company needs to report 
(see “information types” below); 
•	The use of indicators (see “indicator types” below); 
•	The objective of reporting. For example, where the 
objective is to report on how environmental or social 
changes affect the company (i.e., the “outside in” 
perspective described in guidance on key question 1) 
companies are likely to obtain information more easily 
and keep it within their control. By contrast, information 
reported from the “inside out” is more likely to rely on the 
judgement process. 
Information types
In general, information types are either operational, 
analytical or forward-looking: 
•	Operational information includes:
•	 Measurements taken from direct readings, 
observations or estimates about physical properties 
such as the quantity of resources/capital consumed 
or used and/or the quantity of outputs/releases, such 
as waste and emissions;
•	 Details of processes and procedures operated by 
the company.
•	Analytical information discusses, assesses and analyzes 
the procedural, strategic, business and financial 
implications of the company’s environmental, social and 
governance results and plans.
•	Forward-looking information provides insight into future 
activity and its impact on the business.

ESG Disclosure Handbook 17
Indicator types 
Companies select and use indicators for one or more of 
the following purposes:
•	To provide evidence – for example of processes, 
practices, policies or information. Evidence indicators 
tell the reader that there is, for example, a policy 
on human rights (e.g., Coca-Cola19) or recruitment, 
training and development; a board with responsibility 
for sustainability (e.g., BNP Paribas Registration 
Document20); a remuneration committee; a process 
used to determine which risks and opportunities could 
have a material financial impact (e.g., DowDuPont Annual 
Report21).
•	To explain – descriptive and analytical indicators that 
explain strategy, intention or plans, performance, or  
that describe comparative analysis, risk mitigation  
plans, etc. An example from the TCFD recommendations 
would be “explain/describe the climate related risks  
and opportunities the organization has identified  
over the short-, medium - and long-term”22 (e.g., Equinor 
Annual Report23).
•	To provide a measure of absolute or integrated 
performance: 
•	 Absolute measures (expressed as single results or 
ranges) include:
-	Inputs to the organization, for example of energy 
consumed (e.g., Microsoft Data Factsheet 
Environmental Sustainability24), units of water 
withdrawn, number of employees;
-	Outputs such as weight of waste sent to 
landfill (e.g., Veolia Registration Document25), 
greenhouse gases emitted;
•	 Outcomes such as work days lost to injury (e.g., Port 
of Rotterdam Highlights of the Annual Report26), 
efficiency gains from new processes.
•	 Integrated performance measures expressed as 
a performance ratio, such as emissions intensity 
– carbon dioxide emissions equivalent per mboe/
revenue/square meters/products sold.
•	To outline a value designed to communicate the 
relative magnitude of ESG activity either in qualitative 
(high-medium-low importance), quantitative (e.g., 
scale of 1 to 10) or monetary (e.g., value to business/
society – abatement costs, contingent valuation, value-
based pricing or benefit transfer) terms (e.g., BASF’s 
Value-to-Society,27 Nestlé’s Social Impact Valuation,28 
AkzoNobel’s 4D P&L,29 Solvay’s Extra-financial 
statements30).
Investor information needs
Forward-looking ESG information
Investors need more forward-looking information. 
Many are interested in long-term value, but current ESG 
disclosures tend to be backward looking or focused on 
current issues and performance. 
Investors are interested in:
•	Risks that affect the company’s viability; 
•	How ESG issues have affected decisions about future 
capital expenditure or changed forecasts about future 
returns;
•	What value the company is generating and how;
•	Changing capabilities and competencies;
•	Whether investments are supporting current returns or 
future prospects;
•	Strategic and financial decision-making within the 
company;
•	How companies are adapting to the low-carbon 
transition and sustainable development;
•	Whether and how companies are considering different 
scenarios, assumptions and parameters for planning 
purposes and management of uncertainties. 
Investors highlighted the importance of the emphasis 
the Task Force on Climate-related Financial Disclosures 
(TCFD) has put on forward-looking disclosures related to 
potential future financial impacts of climate change.

18 ESG Disclosure Handbook
Key question 5: how should ESG 
information be prepared and presented?
The aim of working through this question is to evaluate the 
options for preparing and presenting ESG information. By 
addressing questions 1 - 4, companies will have a sense 
of the type of ESG content they propose to report, where, 
why and for whom. Question 5 considers how information 
can be prepared and presented, drawing on the range 
of methodologies, guidance and principles available. 
Evaluating how to prepare and present information should 
take account of the intended objectives of the information, 
the reporting channel and the audience(s).
Companies may prepare information using public 
resources, such as published methodologies (e.g., on 
the calculation of greenhouse gas emissions); guidance 
(e.g., management commentary), by direct measurement 
or estimation, or using approaches designed by the 
reporting company. The choices made about the way 
the company prepares and presents information depend 
on the content type, why the company is reporting it, for 
whom, whether recognized methodologies31 for preparing 
information are available and where the company is to 
report the information. For example:
•	Information type – companies are more likely to prepare 
operational information following widely available 
methodologies (such as the Greenhouse Gas Protocol), 
whereas there is limited guidance on preparing analytical 
or forward-looking information;
•	For whom – information provided in analyst 
presentations may have different controls and signoff 
procedures compared to information reported on a 10-K 
or 20-F form;
•	Why - a company is more likely to prepare information in 
conformance with mandatory requirements according 
to a recognized standard with appropriate assurance 
activities.
•	Forward-looking information often includes meaningful 
cautionary language, which can provide the opportunity 
to reduce liability exposure when describing future 
expectations that unknown risks and uncertainties are 
influencing. 
Preparing ESG information is often associated with 
challenges, assumptions, limitations and uncertainties, for 
example relating to data quality, availability and accuracy. 
Clear explanations about these issues, including 
definitions, scope and boundaries, are essential if users 
of information are to understand how companies have 
prepared ESG information.
Reporting principles
When considering how to prepare and present ESG 
information, referring to reporting principles is an 
important part of the judgement process. Reporting 
principles are designed to elicit information that is 
coherent, robust, decision-useful and aligned with  
the objectives, audience for and content of corporate 
reports. The following table summarizes reporting 
principles and qualitative characteristics outlined by  
key frameworks and standards.
TCFD32 
GRI33
SASB34
IIRC35
IFRS36
Clear, 
balanced and 
understandable 
Balance
Neutral 
Faithful 
representation 
Clarity
Fair representation
Understandability
Consistent 
Comparability
Comparable
Consistency and 
comparability
Comparability
Comparable
Aligned
Relevant
Materiality
Useful
Materiality
Relevance & 
materiality
Applicable
Conciseness
Timely
Timeliness 
Timeliness
Specific and 
complete
Completeness 
Complete 
Completeness
Reliable, verifiable 
and objective
Reliability
Verifiable
Reliability 
Verifiability
Accuracy
Distributive
Stakeholder inclusiveness
Stakeholder relationships
Sustainability context
Strategic focus and future 
orientation
Connectivity of information
Table 3: Summary of key principles and qualitative characteristics of decision-useful information

ESG Disclosure Handbook 19
The principle of materiality appears in many reporting 
frameworks. The application of materiality depends on 
judgement and is crucial to prioritizing relevant ESG 
information for external disclosure. The application 
of materiality ensures that important information is 
not obscured and that information satisfies reporting 
requirements, the needs of the intended audience and 
management’s reporting objectives. “Key question 6: how 
much ESG information should be reported?” provides brief 
guidance on the role of materiality in exercising judgement 
about the external disclosure of ESG information.
There is no agreed format or structure for the presentation 
of ESG information. However, when considering the 
options, it is useful to apply the reporting principles of 
clarity and understandability. Generally, the reporting 
principles are satisfied when disclosures are easy to 
navigate, read and search. This means that companies 
will present information in a clear and straightforward way 
using plain language and consistent terminology (with 
definitions for technical terms where necessary), with 
appropriate signposts and labeling and using illustrations, 
graphs and charts where these build understanding and 
help in organizing information according to categories.
Using the business model to decide how to prepare 
and present ESG information
Based on the International Integrated Reporting 
Framework’s representation of the business model, the 
“business model canvass”37 and similar approaches, 
companies sometimes present ESG information according 
business model stages that explain:
•	The environmental and social inputs/resources on which 
the company depends;
•	Business activities, such as production, manufacturing, 
development, research, sales, innovation, etc. that have 
environmental and social implications;
•	Outputs, such as products, services, by-products and 
waste that represent sources of environmental and 
social impacts; 
•	Outcomes, meaning short- to medium-term effects from 
business activities and outputs, for example, reputation, 
employee engagement, customer satisfaction, revenue 
generation, etc.; 
•	Impact, meaning long-term positive or negative, direct or 
indirect impact (i.e., how the outcome affects society).
Investor information needs
Standardization 
Although companies have widely adopted some 
reporting frameworks and standards, investors still face 
challenges when comparing information and therefore the 
performance of companies. Rather than using reporting 
frameworks for tick-box exercises, companies should 
use frameworks to evaluate how best to satisfy reporting 
objectives, improve the quality and comparability of ESG 
information and respond to user needs. Sector-specific 
standards and initiatives, like the Corporate Reporting 
Dialogue, are welcome where they support greater 
coherence, consistency and comparability. 
Timely information 
By the time companies disclose ESG information, it is 
often too old to drive investment decisions. Investors 
are supportive of systems within companies and 
communication channels that enable the reporting of ESG 
information and progress in real time where significant 
developments occur and to align the publication of ESG 
information with the annual report and accounts.
Accessibility 
Investors want to be able to build their own models and 
evaluation approaches and make judgements based on 
the best available ESG data. In order to do so, investors 
need data to be easily accessible in a form that they can 
break down, reformat, restructure and integrate in their own 
models. 
Investors look to analyses from rating agencies and 
specialized research providers, but they rarely rely solely 
on their assessments and opinions. Most have built up a 
sufficient understanding of ESG risks and opportunities 
internally; and they prefer to analyze the data themselves 
and use other sources directly as input for their own 
databases and models. 
Technology is making it easier for investors to track and 
gather information (scraping), to safely store the gathered 
data (data warehousing, cloud-based solutions) and to 
structure and analyze this information (artificial intelligence, 
big data, data analytics). It provides the input for investors’ 
own portfolio managers and analysts to undertake 
independent research, make judgements and evaluate,  
for example, whether material issues warrant discussion 
with company management.
Reliability and assurance 
Investors are reluctant to integrate ESG information 
regarded as unreliable, perceived as greenwashing or 
of poor quality in their investment analyses. They use 
third-party research, news and publicly available sources 
to compensate for perceived shortcomings and biases 
in disclosures. Investors highlight the importance of 
third-party verification/assurance of material ESG issues 
as this supports the trustworthiness and credibility of 
sustainability disclosures.

20 ESG Disclosure Handbook
Key question 6: how much ESG 
information should be reported?
The aim of working through this question is to balance 
the requirement for the report to be true, fair, clear and 
balanced with the need for it to be concise and contain 
material information such that it does not obscure 
important information. Sufficient detail is required to meet 
user needs and satisfy disclosure objectives (in other 
words, responding to the “why,” “for whom,” “what” and 
“how” questions.) 
Companies may apply the following actions and questions 
in determining how much information to include in a 
corporate report:
•	Review and apply reporting principles (see question 5) 
designed to elicit clear, concise, decision-useful 
information, including completeness, specificity, 
relevance, materiality and neutrality. 
•	Does the information duplicate disclosures made 
elsewhere in public reports? If so, could a cross-
reference to the source help to reduce volume? 
•	Categorize information according to the reporting 
objective(s) and audience for the report. Where 
information does not satisfy the objective(s) and/or 
needs of the primary audience, consider reporting it 
through other channels.
•	Is the information specific and unique to the company 
rather than “boilerplate” in character? Boilerplate 
disclosures use generic language applicable to most 
companies in a given industry or sector and not 
sufficiently tailored to reflect the company’s specific 
and unique circumstances. More complete and specific 
disclosures use language that stakeholders best 
understand in the context of the given company and 
provide quantitative performance indicators.
The following resources contain guidance on achieving 
conciseness:
•	Association of Chartered Certified Accountants (ACCA), 
International Integrated Reporting Council (IIRC) and 
International Association for Accounting Education and 
Research (IAAER). (2016). Factors affecting preparers’ 
and auditors’ judgements about materiality and 
conciseness in Integrated Reporting
•	Financial Reporting Council. (2011).  
Cutting clutter. Combating clutter in annual reports 
•	Financial Reporting Council (2014).  
Towards Clear & Concise Reporting  
 
Materiality in reporting – concept,  
role and purpose 
Introduction
This section:
•	Considers the role of materiality in the exercise of 
judgement about external reporting;
•	Analyzes some of the challenges associated with the 
application of materiality; 
•	Describes steps designed to assist with the application 
of materiality in identifying material information for 
external disclosure;
•	Lists selected resources for making materiality 
determinations.
The role and purpose of materiality 
Companies can apply the concept of materiality in a range 
of contexts; for example, to prioritize risks, understand 
impacts, make internal decisions, develop strategic 
direction and set key performance indicators. However,  
for the purposes of the ESG Disclosure Handbook, 
materiality is a concept companies should apply in  
order to determine how much information to include  
in corporate reports so as to achieve the reporting  
objectives and make the information useful to audiences 
including investors. 
Reporting frameworks and standards describe materiality 
as a “principle” or characteristic of reporting designed 
to elicit useful information for the intended audience. 
Materiality is one of the reporting principles specified 
in many reporting frameworks and standards (see “Key 
question 5: how should ESG information be prepared  
and presented?”). 
Generally, where a reporting framework or standard 
specifies reporting principles, companies should apply all 
of the principles in determining, preparing and presenting 
information in external reports. However, materiality is 
sometimes described as a filter or constraining principle 
designed for application after applying other principles, 
such as relevance and reliability. The concept of materiality 
is therefore generally shown as one of the later steps in 
the process of reporting after identifying and evaluating a 
complete list of relevant reporting possibilities.

ESG Disclosure Handbook 21
The purpose of materiality in external reporting is to:
•	Help management prioritize relevant issues of the 
greatest importance in achieving the objective(s) of 
external reporting; and
•	Elicit concise information that is:
-	Complete but free from unnecessary or duplicative 
detail that obscures major trends and events 
specifically relevant to the organization; and
-	Responds to:
-	The objectives of the reporting requirements and 
management’s reporting objectives; and
-	The needs of the intended audience for reported 
information.
Many organizations already have an established materiality 
determination process in place; this handbook does 
not seek to change those processes. However, certain 
challenges are indicative of disconnects between 
materiality determinations for mainstream reporting and 
sustainability reporting purposes respectively, and of 
disconnects between materiality determinations and 
reporting content. 
The application of materiality is also a crucial consideration 
in activities and engagements to assure ESG information. 
Briefly, international assurance standards38 require 
practitioners to consider materiality when planning and 
performing assurance engagements. Assurance providers 
will therefore typically review the approach the reporting 
company uses to determine material information for 
inclusion in corporate reports as well as to check whether 
reported information is free from material misstatement.39 
This involves considering the purpose of the report, the 
intended users, the entity and its context, and the reporting 
framework used to prepare information, all of which the 
ESG Disclosure Handbook covers elsewhere. 
Challenges
While materiality is important to successful external 
reporting, it can be a difficult concept to apply in practice. 
The difficulty in applying the concept of materiality is 
attributable to various factors, including:
•	The wide range of ESG issues (as reflected in the 
Reporting Exchange) that are potentially material to an 
understanding of a company’s ESG performance.
•	The wide range of stakeholders whose views contribute 
to materiality assessments. “The identification 
of material matters is increasingly determined 
through stakeholder engagement. In practice, where 
sustainability matters are concerned, everything is 
material to someone, which begs the question: from 
whose perspective should materiality be determined?”40
•	The range of views about the basis on which a company 
should determine materiality, including by reference to 
impacts on the reporting entity, on financial performance 
or on impacts to the wider system. 
•	The fact that materiality is both a legal concept in 
some jurisdictions as well as a voluntary prioritization 
approach.
•	The multiple definitions of materiality. Compilations 
of some of the common definitions are available.41 
The Corporate Reporting Dialogue (CRD) has issued 
a “Statement of Common Principles of Materiality”42 
that explores the alignment between approaches to 
materiality used by CRD member organizations. 
•	Salience vs materiality. A company’s salient issues are 
those that stand out because they are at risk of the 
most severe negative impacts through the company’s 
activities or business relationships. Salience is 
particularly relevant in a human rights context, using the 
lens of risk to people, not the business, as the starting 
point. Materiality, however, depends on the company 
choosing a particular audience or goal and then judging 
the issues as more or less important.
•	The timeframes over which the materiality of ESG 
matters might become evident given the uncertainty 
about the timing and magnitude of impacts.43 Depending 
on the timescales applied to materiality determination, 
companies may identify issues as “pre-material” 
or emerging risks. Questions then arise about the 
appropriate time to include the issues concerned in 
external reports. 
These challenges manifest themselves in surveys and 
assessments that indicate variability in the application of 
materiality. For example:
•	WBCSD’s 2018 Reporting matters found that 89% 
of WBCSD members disclose the use of a materiality 
process (compared with the baseline year [2013: 
57%]). However, only 38% of WBCSD members aligned 
the content of their reporting to the outcomes of the 
materiality assessment (compared with the baseline 
year [2013: 12%]). This suggests a lack of connectivity 
between materiality assessments and reporting content. 
•	A WBCSD study44 identified that member companies 
disclosed only 29% of the material sustainability issues 
included in sustainability reports in the risk section of 
their annual report; 35% of member companies did 
not disclose any of the sustainability risks identified in 
their sustainability reports in their legal filings. As part of 
the same study, 72% of WBCSD members agreed that 
“in general, companies are not adequately disclosing 
sustainability risks to shareholders.”

22 ESG Disclosure Handbook
Against this background, readers struggle to understand 
the basis on which companies have reached conclusions 
about the information included in their external reports, 
with resulting concerns about the reliability of information 
and viability of assurance activity. Research by the 
Association of Chartered Certified Accountants (ACCA)46 
and others examined 252 integrated reports and found 
that only 136 disclosed the materiality determination 
approach they had used. Fewer than one-quarter of 
the reports explained the evaluation process used for 
prioritizing material items. Research by WBCSD47 and 
a survey by Norton Rose of responses to reporting 
requirements specified by the Hong Kong Stock 
Exchange48 reflect similar findings about the absence of 
detail about determination and evaluation processes. 
Investor information needs 
Material ESG information 
Companies tend to report a long list of indicators based on 
multiple reporting frameworks and attempting to address 
the concerns of all stakeholders. While the intention might 
be to demonstrate that the company is actively managing 
all ESG issues and responding to all stakeholders, the 
amount of ESG information is often overwhelming and 
therefore difficult for investors to use. During the investor 
interviews one interviewee said that 85% of information 
within corporate sustainability reports is of limited value 
when making investment decisions. The information 
presented is either too broad or not material to the investor. 
Companies primarily use sustainability reports and web 
content for stakeholder communications. This is important 
for relationships and reputation and investors value it, but 
when making investment decisions, investors spend more 
time reviewing annual reports, management presentations, 
results announcements, and analyst presentations 
because they contain the most useful information.
Investors interviewed indicated that companies should 
provide insights into how they evaluate and manage ESG 
risks and opportunities (including interactions between 
them) that could influence performance, strategy and the 
business model, and that have potential financial impacts. 
Information about whether and how the board is engaged 
in integrating ESG considerations into strategic thinking is 
also useful. Investors also signaled that frameworks and 
guidance issued by organizations focused on mainstream 
reporting, such as SASB and the IIRC, are important drivers 
in encouraging companies to focus on and report what is 
financially material to the investor. 
Companies should focus more attention on defining the 
topics that are most material for investors and presenting 
information about those topics in reports targeted 
specifically at investors. 
Applying materiality in the judgement process
Whether information is material is a matter of judgement 
that depends on the facts involved, the circumstances 
of the particular reporting company, the information 
necessary to meet the objective of the report and whether 
information could reasonably influence primary users’ 
decisions.
This part of the ESG Disclosure Handbook summarizes 
factors that are relevant to the application of materiality 
within the wider judgement process. The summary draws 
on approaches suggested by the International Integrated 
Reporting Council48 and the International Accounting 
Standards Board (IASB) in their Practice Statement 2 (PS2) 
“Making Materiality Judgements.”
a. Take account of guidance, definitions and prescriptions 
about materiality in the standards, frameworks and 
resources used to prepare the corporate report. For 
example:
         i. The Sustainability Accounting Standards Board 
(SASB) has created unique “materiality maps”49 for 
industries where sustainability issues receive scores 
based on a number of factors, including evidence of 
financial impact.
         ii. EU Directive 2014/95/EU “introduces a new element 
to be taken into account when assessing the 
materiality of non-financial information by referring 
to information ‘to the extent necessary for an 
understanding of the […] impact of (the company’s) 
activity.’ Recital 8 of the Directive states that ‘the 
undertakings which are subject to this Directive 
should provide adequate information in relation to 
the matters that stand out as being most likely to 
bring about the materialization of principal risks of 
severe impacts, along with those that have already 
materialized’.”50
b. Prioritize information that:
         i. Could reasonably influence decisions made by the 
primary intended audience for the information and 
consider the implications of omitting that information.
         ii. Is important to management in managing the 
business and assessing how ESG affects the 
company’s strategy and performance.
         iii. Promotes an understanding of how the company’s 
financial and operational performance and strategic 
objectives are dependent on environmental and 
social resources and relationships.

ESG Disclosure Handbook 23
c. Assess the potential magnitude, velocity, likelihood and 
impact of issues identified in the evaluation process  
(see section 5) in order to determine whether they are,  
or are likely to be, material. 
d. Assess interconnections between:
         i. The way in which relevant issues link and overlap so 
as to influence and amplify each other.
         ii. Audiences and their understanding of impact. 
Anomalies can arise where audiences consider 
impacts by reference to different timescales or have 
a particular interest in an issue even if the impact is 
not correspondingly high.
         iii. The company’s strategy, risks, opportunities and the 
identification of material matters. 
e. Prioritize issues that are specific to the reporting 
organization.
Resources 
A number of resources are available to help companies 
with materiality determination. See a selection below. 
•	Materialitytracker is a platform listing materiality trends, 
standards and practices. 
•	RobecoSAM and the Global Reporting Initiative (GRI) 
offer guidance on Defining Materiality: What Matters to 
Reporters and Investors. 
•	For an understanding of materiality, interconnections 
and dynamic risk profiles:
•	 The International Council for Science’s Guide to SDG 
Interactions: From Science to Implementation. 
•	 KPMG’s dynamic risk assessment methodology. 
•	 The Cornerstone Capital Group’s guidance on 
dealing with dynamic issues and a shifting ESG 
materiality matrix
•	Reporting 3.0’s Blueprint 2: Accounting (June 2018) 
provides commentary on materiality determination,  
lists procedural methods or tests for applying the 
materiality principle, distinguishes between “internal 
materiality,” “external direct materiality” and “external 
indirect materiality,” and introduces the concept of 
integral materiality.
•	The Erb Institute at the University of Michigan offers a 
Materiality Assessment toolbox. 
•	Materiality in Corporate Governance: The Statement 
of Significant Audiences and Materiality by Robert G. 
Eccles and Tim Youmans of Harvard Business School 
sets out an approach to “audience-focused materiality 
determination.” 
•	The International Auditing and Assurance Standards 
Board’s Extended External Reporting (EER) Assurance 
project 
•	The Committee of Sponsoring Organizations of the 
Treadway Commission (COSO) and the World Business 
Council for Sustainable Development (WBCSD) 
“Guidance for Applying Enterprise Risk Management 
(ERM) to Environmental, Social and Governance (ESG)-
related Risks.”
•	Datamaran’s “Seven Tips to the Perfect Materiality 
Analysis” 
•	Future-Fit – “A new approach to materiality: back-casting 
from the future to prioritize what really matters”

24 ESG Disclosure Handbook
5.	Steps in the  
evaluation process
A: Evaluate
The evaluation process incorporates, but is not 
necessarily limited to, five tests to identify information 
that:
1. Supports the objectives and purpose of reporting;
2. Has business value;
3. Meets the needs of the primary intended audience(s);
4. Is supportable;
5. Can be clearly communicated. 
1. Supports the objectives and purpose  
of reporting
Which ESG information best:
•	Supports the company’s communication objectives? 
For example, by:
•	 Providing an integrated and coherent picture of 
performance that links strategy with operational 
performance;
•	 Evidencing risk awareness and management;
•	 Explaining management’s view and thinking;
•	 Identifying value-generating activities and plans;
•	 Demonstrating resilience and efficiencies;
•	 Describing business model developments;
•	 Explaining value creation potential and growth 
opportunities;
•	 Explaining financial prospects.
•	Satisfies the requirements of mandatory reporting 
provisions?
•	Conforms to the requirements of voluntary frameworks 
the company has chosen to adopt?
•	Achieves the objective of the report? For example, the 
objective of an integrated report is to communicate the 
company’s ability to create value. Companies should 
therefore include ESG issues if they materially affect its 
ability to create value.
2. Has business value
Which ESG information best:
•	Differentiates the company from competitors?
•	Demonstrates progress on existing commitments and 
values? 
•	Supports and evidences strategic and operational 
positioning? 
•	Limits challenges associated with commercial 
sensitivities, competition and liabilities?
•	Minimizes potential risks associated with disclosures?
3. Meets the needs of the primary intended 
audience(s)
Which ESG information best:
•	Satisfies the information needs of the company’s 
primary or significant stakeholders or stakeholder 
groups? For example:
•	 Stakeholders on which the company depends.
•	 High-impact groups that can remove, grant or 
influence “license to operate,” damage or build 
company reputation, contribute to or detract from 
the ability to learn and innovate and/or restrict or 
provide access to resources such as investment.
•	Provides value to and satisfies the information needs 
of investors and supports their decision-making? For 
example, by:
•	 Focusing more on ESG matters that have potentially 
material strategic and financial impacts;
•	 Connecting ESG information to financial information;
•	 Not obscuring information for investors with 
information intended for a wider audience;
•	 Describing future risks and opportunities; 
•	 Exploring various scenarios and explaining 
associated assumptions, parameters and 
uncertainties; 
•	 Describing resilience and adaptability; 
•	 Explaining value creation strategies, growth 
opportunities and efficiency efforts;

ESG Disclosure Handbook 25
•	 Confirming or changing past or present 
expectations based on previous evaluations; 
•	 Adding value as input to expectations about the 
future performance of the business.
•	Responds to stakeholder feedback that is consistent 
with business objectives for external disclosure? 
•	Responds to stakeholder feedback in previous years by 
explaining the actions taken?
•	Fits into the primary source of information used by the 
key/target audience? 
•	Provides the content/information/indicator types 
that support user needs? For example, to address 
objectives related to strategic development, resilience 
and efficiencies, certain audiences will be particularly 
interested in forward-looking information and, 
especially, quantitative content that links to strategic 
direction, business model developments and financial 
prospects. This could include resilience-related financial 
disclosures such as sensitivities, committed and 
uncommitted capital expenditure, portfolio optimization, 
management of the cost base, internal rate of return, 
production forecasts, breakeven and cost of supply.
4. Is supportable
Which ESG information:
•	Aligns best with the company’s reporting strategy?
•	Is comparable through the application of reporting 
standards, including sector-specific standards?
•	Can be provided in a timely manner and a universal 
format?
•	Is consistent with (or explains departures from) the 
approach used in previous reporting cycles?
•	Has the characteristics of decision-useful information, 
including relevance and company specificity?
•	Aligns with peer best practice, including that of 
companies in the same sector and jurisdiction?51
•	Defines and explains quantitative indicators and metrics 
used to monitor and report on performance, including 
the methodology and scope used for preparing 
indicators?
•	Explains limitations, challenges, assumption and 
estimation methods, exclusions and omissions?
•	Responds to appropriate reporting provisions and 
principles? 
•	Meets appropriate quality, controls and assurance 
expectations?
5. Can be clearly communicated
Which ESG information best:
•	Provides an appropriate and proportionate balance 
of different information/content/indicator types and 
perspectives?
•	Enhances clarity and conciseness?
•	Reflects the qualities outlined in “reporting principles” 
(see “Key question 5: how should ESG information be 
prepared and presented?”)?
•	Provides a balanced and objective account of 
performance, prospects and plans?
•	Provides a coherent and connected view within the 
report and across different disclosure channels?
•	Responds to formatting and accessibility expectations?
•	Responds to communication and design learnings? 
Companies could include key messages relating to 
leadership, innovation, growth, differentiation and 
strategy for investors in management presentations, 
results announcements and videos, slides and 
speeches at capital markets days, for example. 
Companies may share announcements related to 
innovative industry-leading initiatives and projects via 
web articles, blogs, media releases and social media.

26 ESG Disclosure Handbook
B: Decide
The “decide” part of the process provides guidance on 
making decisions that rely on the evaluation process 
together with assumptions, opinions and the subjective 
judgement of management and experts (if appropriate). 
Consider whether there are any reliable working 
assumptions for the purpose of decision-making and 
the materiality determination process. In their Practice 
Statement 2 on “Making Materiality Judgements,” the 
International Accounting Standards Board indicates that 
management may work on the following assumptions:
a. Users have reasonable knowledge of the business and 
economic activities in order to review and analyze the 
information diligently;
b. Reports should focus on the common interests of the 
intended audience rather than the particular needs of 
individual users or types of users;
c. Materiality judgements made in previous reporting 
periods can be relied upon unless the circumstances 
and facts that informed the judgment have changed 
significantly;
d. Companies must include information that is material to 
the report even where it is also publicly available from 
other sources.
To support a judgement, internal and external expert 
advice may help:
•	Identify alignment with strategic objectives and key 
stakeholders who can support or hinder progress 
towards objectives, mission and vision. Consult with 
management.
•	Provide feedback from key stakeholders, connecting 
objectives and audiences. Consult with investor relations 
on key measures of interest, specific questions raised 
on investor calls and the focus of specific analysts 
who cover the company. Consult with communications 
professionals on messaging alignment, key words or 
phrases, design, circulation, number of hits, etc. 
•	Provide insights on the suitability of various measures 
for a given objective or question and infrastructure 
requirements to capture high-quality data. Consult with 
business analysts, social scientists, natural scientists 
and economists. 
•	Ensure objectivity and balance, avoiding vague, 
optimistic and even hyperbolic statements. Evaluate 
commercial sensitivities, competition and potential 
liability challenges. Consult with communications and 
legal colleagues.
•	Provide insights on the suitability of various processes 
and procedures that support a control environment, data 
structures, IT systems and legal reviews that respond to 
the objective, audience, information type and channel 
for disclosure. Consult with controllers, assurance 
providers, internal auditors, software development 
engineers and data scientists.
•	Provide feedback on accessibility, availability and 
prevalence of key information. Consult with key 
stakeholders and data users.
•	Provide a thorough assessment of communication 
objectives and stakeholder relations through tailored 
evaluations. Consultants can evaluate impact, reach  
and visibility.

ESG Disclosure Handbook 27
C: Document 
To communicate the judgement process,  
management should document the process followed, 
any uncertainties, limitations and sensitivities, as well  
as the conclusions reached.
The process followed 
Descriptions of the following will help users and readers 
understand the approach:
•	Sources used and relied upon – including reporting 
standards, frameworks, calculation methodologies, 
information sources, meetings, research and analytics, 
or the ESG Disclosure Handbook, etc. (e.g., Unilever – 
About our reporting52 and Basis of Preparation53);
•	Discussions held and with whom – for example 
consumers, customers, NGOs, investors, suppliers 
and employees, etc. (e.g., Tata Steel – Stakeholder 
Engagement54);
•	The approval process and decision-makers – for 
example management structures, leadership, steering 
groups, advisors, board committees, etc. (e.g., 
ArcelorMittal – Transparent good governance55);
•	Connections, selections and policies – for example how 
companies use cross references, relationships, filters, 
weighting and disclosure policies (e.g., Itochu – Editorial 
policy56);
•	Conclusion/final decisions – clarifying and outlining 
scope, content, principles, etc. (e.g., Praxair – About this 
report57).
Uncertainties, limitations, sensitivities and 
reappraisal
Descriptions of the following will help users and readers 
understand uncertainties, limitations, sensitivities and 
reappraisal:
•	Information evaluated, prepared or provided under 
conditions of uncertainty;
•	Challenges and barriers identified through the 
judgement process;
•	Boundaries and scope of assessments and information;
•	Internal controls, checks and balances;
•	Key factors that could change and lead to 
reassessment;
•	Qualifications linked to known and unknown risks  
and uncertainties.

28 ESG Disclosure Handbook
Key questions
1. Why report ESG information? 
•	Supports the objectives and purpose of reporting
•	Has business value
•	Meets the needs of the primary intended audience(s)
•	Is supportable
•	Can be clearly communicated
2. For whom should ESG information be reported? 
•	Internal stakeholders like employees 
•	External stakeholders like government and society 
•	Connected stakeholders like investors 
3. Where should ESG information be reported? 
•	Annual, integrated and sustainability reports
•	Media releases
•	Website articles and blogs
•	Topic-specific reports
•	Data portals
•	Presentations
•	Webinars
4. What ESG information should be reported? 
•	Content types 
•	ESG subjects
•	Business model stages
•	Information types
•	Information perspective 	
•	Indicator types
5. How should ESG information be prepared and presented? 
•	Standards, methodologies and frameworks
•	Controls
•	Scope and boundaries
•	Uncertainties, assumptions and limitations
6.How much ESG information should be reported? 
•	Completeness
•	Specificity
•	Conciseness
•	Relevance
•	Materiality
•	Neutrality/balance	
Process 
A. Evaluate 
•	Support for the objectives and purpose of reporting
•	Evidence of business value
•	Evidence of value to the intended audience for information 
•	Whether information is supportable and useful
•	Whether information can be clearly communicated
B. Decide 
•	Understand assumptions and limitations
•	Seek internal and external expert advice
C. Document 
•	Sources used and relied upon
•	Discussions held and with whom
•	The approval process and decision-makers
•	Information evaluated, prepared or provided under 
conditions of uncertainty
•	Challenges and barriers through the judgement process
•	Boundaries and scope of assessments and information
•	Internal controls, checks and balances
•	Key factors that could change and lead to reassessment
•	Qualifications linked to known and unknown risks and 
uncertainties
6.	Handbook checklist

ESG Disclosure Handbook 29
7.	Endnotes
1  KPMG. (2017). The road ahead – The KPMG Survey of 
Corporate Responsibility Reporting 2017. Retrieved 
from https://assets.kpmg.com/content/dam/kpmg/xx/
pdf/2017/10/kpmg-survey-of-corporate-responsibility-
reporting-2017.pdf.  
2  The ESG Disclosure Handbook draws on relevant 
aspects of professional judgement frameworks, 
including the 2016 Professional Judgement Framework 
for Financial Reporting Decision Making by the Institute 
of Chartered Accountants of Scotland (ICAS) and the 
KPMG Professional Judgement Framework. 
3  For an overview of the reporting landscape, see the 
Reporting Exchange at www.reportingexchange.com. 
4 See International Integrated Reporting Council (IIRC). 
(2013). Capitals Background Paper for <IR>. Retrieved 
from https://integratedreporting.org/wp-content/
uploads/2013/03/IR-Background-Paper-Capitals.pdf. 
5  PwC. (2016). A foot in the past and an eye to the future 
– The importance of forward-looking information in 
company reporting. 
6  Hope, O.K., Hu, D. & Lu, H. (2016). The Benefits of 
Specific Risk-Factor Disclosures. Rotman School of 
Management Working Paper No. 2457045; Singapore 
Management University School of Accountancy 
Research Paper No. 2015-35. Retrieved from  http://
ssrn.com/abstract=2457045. 
7  Sustainability Accounting Standards Board (SASB). 
(2017). State of Disclosure Report – 2017. Retrieved 
from https://library.sasb.org/state-disclosure-
report-2017/. 
8  eftec – economics for the environment. (n.d.) What can 
Natural Capital Statements tell us beyond ESG data? 
Retrieved from https://www.eftec.co.uk/natural-capital-
statements. 
9  Eccles, R.G. & Krzus, M.P. (2018). Constructing Alphabet 
Inc.’s 2017 Mock Integrated Report. Retrieved from 
https://papers.ssrn.com/sol3/papers.cfm?abstract_
id=3206290. 
10  Task Force on Climate-related Financial Disclosures 
(TCFD). (2017). Final Report: Recommendations of the 
Task Force on Climate-related Financial Disclosures. 
Retrieved from https://www.fsb-tcfd.org/wp-content/
uploads/2017/06/FINAL-TCFD-Report-062817.pdf. 
11  See projects within WBCSD’s business decision-
making program area at https://www.wbcsd.org/
Programs/Redefining-Value/Business-Decision-
Making. 
12  BHP. (n.d.). BHP Sustainability Report 2018, p. 6. 
Retrieved from https://www.bhp.com/investor-centre/-/
media/documents/investors/annual-reports/2018/
bhpsustainabilityreport2018.pdf. 
13  BMW Group. (n.d.). Sustainable Value Report 2017, 
p. 25. Retrieved from https://www.bmwgroup.
com/content/dam/bmw-group-websites/
bmwgroup_com/ir/downloads/en/2017/BMW-Group-
SustainableValueReport-2017--EN.pdf. 
14  DSM. (2018). Royal DSM Integrated Annual Report 
2018, p. 148. Retrieved from https://annualreport.
dsm.com/content/dam/annualreport/ar2018/en_US/
downloads/DSM-Annual-Report-2018.pdf. 
15  AccountAbility, the United Nations Environment 
Programme, and Stakeholder Research Associates. 
(2005). The Stakeholder Engagement Manual – The 
Practitioners Handbook on Stakeholder Engagement. 
Retrieved from http://www.unep.fr/shared/publications/
pdf/webx0115xpa-seHandbooken.pdf. 
16  Eccles, R.G. & Youmans, T. (2015). Materiality in 
Corporate Governance: The Statement of Significant 
Audiences and Materiality.  Harvard Business School.
17  See the Reporting Exchange at www.
reportingexchange.com.
17  Association of Chartered Accountants (ACCA) & 
Climate Disclosure Standards Board (CDSB). (2016). 
Mapping the Sustainability Reporting Landscape – Lost 
in the Right Direction.
18  Coca-Cola. (n.d.). Human Rights Policy. Retrieved from 
https://www.coca-cola.co.uk/content/dam/journey/gb/
en/hidden/PDFs/human-and-workplace-rights/human-
rights-policy/human-rights-policy-pdf-english.pdf. 
20  BNP Paribas. (2018). Registration Document and 
Annual Financial Report 2017, p. 55. Retrieved from 
https://invest.bnpparibas.com/sites/default/files/
documents/ddr2017_bnp_paribas_gb.pdf. 
21  DowDuPont. (2018). Unlocking value: Creating three 
world-leading companies – 2017 Annual Report, p. 75-77. 
Retrieved from http://s21.q4cdn.com/813101928/files/
doc_downloads/DowDuPont-2017-Annual-Report.PDF. 
22  Task Force on Climate-related Financial Disclosures 
(TCFD). (2017). Final Report: Recommendations of the 
Task Force on Climate-related Financial Disclosures.
23  Statoil. (n.d.). 2017 Annual Report and Form 20-F, p. 
68-69 at https://www.equinor.com/content/dam/statoil/
documents/annual-reports/2017/statoil-annual-
report-20f-2017.pdf.

30 ESG Disclosure Handbook
24  Microsoft. (n.d.). 2017 Data Factsheet: Environmental 
Indicators. Retrieved from http://download.microsoft.
com/download/0/0/6/00604579-134B-4D0E-97C3-
D525DFB7890A/Microsoft_2017_Environmental_
Data_Factsheet.pdf. 
25  Veolia. (2018). Registration Document 2017 – Annual 
Financial Report, p. 281-283. Retrieved from http://
csr-performance-2017.veolia.com/wp-content/
uploads/2018/07/Veolia_Environnement_Registration_
document_2017.pdf. 
26  Port of Rotterdam. (n.d.). Working together on 
tomorrow’s port. Make it happen. Highlights of 
the 2017 Annual Report, p. 16 at https://www.
portofrotterdam.com/sites/default/files/hightlights_
annual_report_2017.pdf?token=3WD3woSz. 
27  BASF. (n.d.). Impact Categories. Retrieved from https://
www.basf.com/global/en/who-we-are/sustainability/
management-and-instruments/quantifying-
sustainability/we-create-value.html. 
28  Nestlé. (2017). Social Impact Valuation: A social impact 
model of employment and Nestlé case study. Retrieved 
from http://www.nestle.com/asset-library/documents/
creating-shared-value/social-impact-valuation-white-
paper-2017.pdf. 
29  AkzoNobel. (2016). Using four dimensions to generate 
more value. Retrieved from http://report.akzonobel.
com/2015/ar/case-studies/using-four-dimensions-to-
generate-more-value.html. 
30  Solvay. (2018). Extra-Financial Statements. Retrieved 
from http://annualreports.solvay.com/2017/en/extra-
financial-statements.html. 
31  The Reporting Exchange includes methodologies 
for preparing ESG information, under “reporting 
resources.”
32  Task Force on Climate-related Disclosures. (2017). 
Recommendations of the Task Force on Climate-
related Financial Disclosures. Retrieved from https://
www.fsb-tcfd.org/wp-content/uploads/2017/06/FINAL-
TCFD-Report-062817.pdf
33  Global Reporting Initiative (GRI). (n.d.). Standards. 
Retrieved from https://g4.globalreporting.org/how-you-
should-report/reporting-principles/pages/default.aspx. 
34  Sustainability Accounting Standards Board (SASB). 
(2017). SASB Conceptual Framework. Retrieved from 
https://www.sasb.org/wp-content/uploads/2017/02/
SASB-Conceptual-Framework.pdf. 
35  International Integrated Reporting Council (IIRC). 
(2013). The International <IR> Framework. Retrieved 
from http://integratedreporting.org/wp-content/
uploads/2015/03/13-12-08-THE-INTERNATIONAL-IR-
FRAMEWORK-2-1.pdf. 
36  IFRS. (2018). Conceptual Framework for Financial 
Reporting. Retrieved from https://www.ifrs.org/issued-
standards/list-of-standards/conceptual-framework/. 
37  Italian Network for Business Reporting (Network 
Italiano Business Reporting - NIBR. (n.d.). Business 
Model Representation in Integrated Reporting: Best 
Practices and Guidelines. Retrieved from http://
integratedreporting.org/wp-content/uploads/2018/03/
NIBR_GUIDA-BM_16feb2018_ENG.pdf. 
38  International Auditing and Assurance Standards Board 
(IAASB). (2018). International Standard on Assurance 
Engagements (ISAE) 3000 (Revised), Assurance 
Engagements Other than Audits or Reviews of 
Historical Financial Information, paragraph 44.
39  International Auditing and Assurance Standards Board 
(IAASB). (2018). EER Assurance – Draft Guidance, 
paragraph 109. Retrieved from http://www.iaasb.
org/system/files/meetings/files/20180917-IAASB-
Agenda_Item_7-A-EER-Draft-Guidance.pdf. 
40  Association of Chartered Accountants (ACCA) & 
Climate Disclosure Standards Board (CDSB). (2016). 
Mapping the Sustainability Reporting Landscape: Lost 
in the Right Direction, page 36. 
41  For instance, see Association of Chartered Certified 
Accountants (ACCA), Flora & Fauna International 
and KPMG. (2013). Identifying natural capital risk and 
materiality. Retrieved from https://www.accaglobal.
com/content/dam/acca/global/PDF-technical/
sustainability-reporting/natural-capital-materiality-
paper.pdf and Phelps, Danyelle Lynne (2016). Analysis 
of Materiality Assessment Methods. Retrieved from 
https://dukespace.lib.duke.edu/dspace/bitstream/
handle/10161/11818/Phelps%20MP%20-%20
Analysis%20of%20Materiality%20Assessment%20
Methods%202016-04-15.pdf.

ESG Disclosure Handbook 31
42  Corporate Reporting Dialogue. (2016). Statement of 
Common Principles of Materiality of the Corporate 
Reporting Dialogue. Retrieved from https://
corporatereportingdialogue.com/wp-content/
uploads/2016/03/Statement-of-Common-Principles-
of-Materiality.pdf
43  Cornerstone Capital Group. (2015). A Shifting ESG 
Materiality Matrix: What has mattered, What may matter. 
44  WBCSD. (2017). Sustainability and enterprise risk 
management: The first step towards integration. 
Retrieved from https://www.wbcsd.org/contentwbc/
download/2548/31131. 
45  Association of Chartered Certified Accountants 
(ACCA), International Integrated Reporting Council 
(IIRC) and International Association for Accounting 
Education and Research (IAAER). (2016). Factors 
Affecting Preparers’ and Auditors’ Judgements about 
materiality and conciseness in Integrated Reporting.
46  WBCSD. (2018). Materiality in corporate reporting – a 
White Paper focusing on the food and agriculture 
sector. Retrieved from https://www.wbcsd.org/
Programs/Redefining-Value/Resources/A-White-Paper-
focusing-on-the-food-and-agriculture-sector. 
47  Norton Rose Fulbright. (2018). Analysis of ESG 
practice disclosure in 2016/2017. Retrieved from 
http://www.nortonrosefulbright.com/knowledge/
publications/167823/analysis-of-esg-practice-
disclosure-in-20162017. 
48  There are four steps in Integrated Reporting <IR> 
Framework Section 3D – The materiality determination 
process: (1) identifying relevant matters on the basis 
of their ability to affect value creation; (2) evaluating 
the importance of relevant matters for their known 
or potential effect on value creation; (3) prioritizing 
matters on the basis of their relative importance; 
(4) determining what information to disclose about 
material matters.
49  Sustainability Accounting Standards Board. (n.d.). 
Materiality Map. Retrieved from https://materiality.sasb.
org/. 
50  Read the full text on EUR-Lex at https://
eur-lex.europa.eu/legal-content/EN/
TXT/?uri=CELEX%3A52017XC0705%2801%29. 
51  Information may be gleaned from surveys and studies, 
such as: United Nations Commission for Trade and 
Development (UNCTAD). (2018). Reporting on the 
Sustainable Development Goals: A Survey of Reporting 
Indicators. Retrieved from http://unctad.org/en/
PublicationsLibrary/ser-rp-2018d1_en.pdf. 
52  Unilever. (n.d.). About our reporting. Retrieved from 
https://www.unilever.com/sustainable-living/our-
approach-to-reporting/about-our-reporting/. 
53  Unilever. (2017). Unilever’s Basis of Preparation 2016 
for those Unilever Sustainable Living Plan (USLP) 
and Environmental and Occupational Safety (EOS) 
performance measures selected for independent 
assurance. Retrieved from https://www.unilever.
com/Images/unilever-basis-of-preparation-uslp-
reporting-2016_tcm244-504821_en.pdf. 
54  Tata Steel. (n.d.). Stakeholder Engagement. Retrieved 
from http://www.tatasteel.com/investors/integrated-
report-2017-18/stakeholder-engagement.html. 
55  ArcelorMittal. (n.d.). Sustainability governance. 
Retrieved from https://corporate.arcelormittal.com/
sustainability/our-10-outcomes/transparent-good-
governance/sustainability-governance.
56  Itochu. (2018). Annual Report 2018, p.4. Retrieved from 
https://www.itochu.co.jp/en/files/ar2018E.pdf. 
57  Praxair. (2017). Sustainable Value Report 2016, p. 
40. Retrieved from http://www.praxair.com/-/media/
corporate/praxairus/documents/reports-papers-case-
studies-and-presentations/our-company/sustainability/
praxair-2016-svr.pdf?la=en.

32 ESG Disclosure Handbook
About the World Business Council for 
Sustainable Development (WBCSD)
WBCSD is a global, CEO-led organization of over  
200 leading businesses working together to accelerate 
the transition to a sustainable world. We help make our 
member companies more successful and sustainable 
by focusing on the maximum positive impact for 
shareholders, the environment and societies. 
Our member companies come from all business sectors 
and all major economies, representing a combined 
revenue of more than USD $8.5 trillion and 19 million 
employees. Our global network of almost 70 national 
business councils gives our members unparalleled reach 
across the globe. WBCSD is uniquely positioned to work 
with member companies along and across value chains 
to deliver impactful business solutions to the most 
challenging sustainability issues. 
Together, we are the leading voice of business for 
sustainability: united by our vision of a world where more 
than 9 billion people are all living well and within the 
boundaries of our planet, by 2050. 
www.wbcsd.org
Disclaimer 
This publication is released in the name of WBCSD. It 
does not, however, necessarily mean that every member 
company agrees with every word. This publication has 
been prepared for general guidance on matters of interest 
only and does not constitute professional advice. You 
should not act upon the information contained in this 
publication without obtaining specific professional advice. 
No representation or warranty (express or implied) is given 
as to the accuracy or completeness of the information 
contained in this publication, and, to the extent permitted 
by law, WBCSD, its members, employees and agents do 
not accept or assume any liability, responsibility or duty 
of care for any consequences of you or anyone else 
acting, or refraining to act, in reliance on the information 
contained in this.
Copyright
Copyright © WBCSD April 2019.

ESG Disclosure Handbook 33

This research and publication are funded  
by the Gordon and Betty Moore Foundation
www.moore.org