Revealing the full picture
Your guide to 
ESG reporting
Guidance for issuers on the 
integration of ESG into investor 
reporting and communication

Introduction
2
Towards deeper understanding between issuers and investors
4
ESG reporting priorities
6
01.	Strategic relevance
8
02.	Investor materiality
12
03.	Investment grade data
18
04.	Global frameworks
22
05.	Reporting formats
28
06.	Regulation and investor communication
32
07.	Green Revenue reporting
36
08.	Debt finance
40
Summary
46
How LSEG supports ESG reporting and communication
47
Appendices
48
Contents
This Guidance is for information only. It has been produced by London Stock 
Exchange Group plc and its group companies, including London Stock Exchange 
plc, FTSE Russell (a trading name of FTSE International Limited and Frank Russell 
Company) and Borsa Italiana S.p.A (LSEG). While all information contained herein is 
obtained from sources believed to be accurate and reliable, LSEG and the individual 
authors of the Guidance do not accept responsibility for any errors, omissions,  
or inaccurate information or any decisions made in reliance on this Guidance.  
Any inaccuracies can be reported in writing to sustainablebusiness@lseg.com  
but neither LSEG nor the individual authors of the Guidance shall become 
responsible for such inaccuracies as a result of them being reported.
This publication does not constitute an offer to buy or sell, or a solicitation of  
an offer to sell, any securities, or the solicitation of a proxy, by any person in any 
jurisdiction in which such an offer or solicitation is not authorised, or in which the 
person making such an offer or solicitation is not qualified to do so, or to any 
person to whom it is unlawful to make such an offer or solicitation.
This Guidance is not offered as advice on any particular matter and must not  
be treated as a substitute for specific advice. In particular, information in this 
publication does not constitute legal, professional, financial or investment advice 
or an endorsement of any particular reporting standard or framework in relation 
to Environmental, Social and Governmental (ESG) factors. Advice from a suitably 
qualified professional should always be sought in relation to any particular 
matter or circumstances.
“FTSE®”, “Russell®”, “FTSE Russell®”, “London Stock Exchange®”, “London Stock 
Exchange Group®” and other related service marks and trademarks are trademarks 
of the London Stock Exchange group companies. No part of these trade marks  
or any other trade mark owned by the London Stock Exchange or any of its group 
undertakings can be used, reproduced or transmitted in any form without  
express written consent by the owner of the trade mark.
© January 2018

Revealing the full picture
Introduction
Who this Guidance is for
Institutional investors are interested in ESG issues for 
all of the entities they invest in, irrespective of whether 
they are large or small, equities or bonds, listed or 
unlisted, across all industries. And in our view, whatever 
the entity in question, the characteristics of high 
quality reporting and effective communication with 
investors are always broadly the same.
Therefore we believe that you will find this Guidance 
equally relevant to your organisation whether it is  
a large publicly listed issuer with a long track record  
of reporting; a smaller company; a privately held 
business; or a debt issuer.
How investors use ESG 
information is changing
In recent years, the views of investors in this area have 
matured significantly. ESG-related information has 
moved from a ‘peripheral’ to a ‘core’ part of investment 
analysis, across all asset classes1.
Signatories to the United Nations-supported Principles 
for Responsible Investment (PRI) now represent $60trn2 
in assets under management, up from $22trn2 in 2010. 
Almost all leading institutional investors of UK and 
Italian listed companies are PRI signatories. Recent 
research from the Global Sustainable Investment Alliance 
(GSIA)3 suggests that sustainable investing strategies 
now represent more than 60% of professionally  
managed assets for EU investors.
The need for issuers to respond to this demand for 
information is clear. By disclosing the information that 
investors want, issuers can provide reassurance that 
they are effectively managing business risks and 
identifying opportunities. There is growing evidence 
that issuers that publish high quality information on 
the longer-term implications of ESG for their business 
are more likely to attract and retain long-term 
investors4. These issuers can also reduce the cost of 
capital and increase their ability to raise new capital  
to finance sustainable projects.
The process of reflecting on, analysing and reporting 
ESG issues provides important insights into the positive 
and negative implications for financial and operational 
performance. This also applies to decisions about 
strategy and capital expenditure. Further, having a clear 
view on ESG issues and strategy positions businesses 
at the forefront of opportunities presented by the 
unfolding sustainable and green economy.
While there is a compelling case for companies 
strengthening their reporting on ESG issues, research 
suggests that Chief Executives tend to overestimate their 
success in communicating with investors: in a recent 
study, over a third of companies believed they were able 
3
 60
%
of assets managed for  
EU investors incorporate 
sustainable investment 
strategies
Revealing the full picture
Introduction
Once upon a time, environmental, social and governance  
(ESG) factors were a niche interest among asset owners, asset 
managers, banks, brokers and investment consultants. No longer. 
Investors now routinely analyse information on ESG performance 
alongside other financial and strategic information in order to 
gain a better understanding of companies’ future prospects.
Issuers’ ESG performance on subjects such as resource 
use, human rights, health and safety, corruption and 
transparency is increasingly used to draw conclusions 
about the quality of their management, identify their 
exposure to business risks and assess their ability to 
leverage business opportunities. Therefore it is becoming 
more and more important for companies and other 
issuers to communicate with investors clearly and 
accurately on these aspects of their performance.
The intention of this Guidance is to help companies 
gain a clear understanding of what ESG information 
they should provide and how they should go about 
providing it. This is a task for which London Stock 
Exchange Group, as a leading international markets 
infrastructure provider connected to issuers, sell side 
and investors is ideally placed.
About London Stock  
Exchange Group
Sitting at a critical junction between issuers and 
investors, London Stock Exchange Group plays an 
essential role in supporting global sustainable 
economic growth.
With more than 2,700 companies hosted on our 
markets, we seek to recognise and encourage dynamic 
companies that will drive long-term economic 
prosperity; helping them improve the sustainability of 
their business and enhance their ability to raise capital 
for growth and employment creation. At the same time, 
through FTSE Russell, our benchmarking and analytics 
business, we seek to support investors in making 
informed and sustainable decisions; providing them 
with the information and tools they need to assess 
issuers’ strategy, performance and governance.
2
Introduction
 “Our Group plays an essential 
role in supporting sustainable 
economic development through 
a number of our businesses 
around the world. This ESG 
guide is an important new tool 
to encourage and assist issuers 
in providing ESG information 
that investors can use to  
inform their engagement with 
companies and their investment 
decisions. I hope this report 
helps improve transparency and 
disclosure in this increasingly 
important area.”
to quantify the business value of sustainability initiatives 
accurately, yet only 7% of investors agreed5.
This discrepancy can be ascribed to a number of practical 
challenges, including: investors finding it difficult to 
access appropriate data and information; issuers failing 
to understand what information investors need; investors 
using different ESG information in their investment 
research and raising different questions with issuers;  
and issuers’ needs and interests differing in terms  
of the ESG issues that they see as important.
The aims of this Guidance are to:
— make companies more aware of the importance  
of providing high quality ESG information, and 
engaging investors on sustainability-related issues;
— stimulate interest in the innovation opportunities 
opened by this new economic paradigm;
— help issuers and investors to navigate the complex 
landscape of ESG reporting;
— enable richer data flows and dialogue on ESG 
between issuers and investors;
— support the consolidation of sound global reporting 
standards; and
— enable investors to make better informed 
investment decisions.
 $60trn2
Signatories to the  
United Nations-supported 
Principles for Responsible 
Investment (PRI) now 
represent $60trn2 in  
assets under management,  
up from $22trn2 in 2010.

Revealing the full picture
Towards deeper understanding between issuers  
and investors
Is ‘ESG’ the same as 
‘sustainability’ and  
‘corporate responsibility’?
Many companies use ‘sustainability’, ‘corporate 
responsibility’ or ‘corporate social responsibility’ to refer 
to strategies or programmes related to environmental, 
social or governance (ESG) activities. We make no 
particular recommendation concerning which term  
to use.
For the purpose of this Guidance, LSEG has chosen  
to use the term ‘ESG’ as it has become a commonly-
used investment term. Other terms for this type  
of ESG reporting can include ‘non-financial’ and 
‘extra-financial’ reporting.
 “We have a ﬁduciary duty 
towards our members and we 
are committed to protecting 
retirement savings from any 
potential investment risk 
within a long-term horizon. 
The best way to do this is to 
take not only ﬁnancial and 
economic factors but also  
ESG performance into 
consideration.”
Maurizio Agazzi
Direttore Generale, Fondo Pensione Cometa
5
Revealing the full picture
Towards deeper understanding between issuers  
and investors
In publishing this ESG 
Reporting Guidance, our aim  
is to help enable your company 
to effectively navigate the 
reporting landscape of today 
and tomorrow.
You don’t have to be big  
to be an ESG reporter
The ESG dimension is not something only larger 
companies need to concern themselves with. When  
a small or mid-sized issuer understands the value of 
ESG data and reporting, investors’ ability to see the full 
picture of its performance and prospects is enhanced 
just as much.
London Stock Exchange Group (LSEG) is the global 
market of choice for such smaller companies. Over 1,000 
of them are quoted on AIM in the UK and Italy; more 
than 460 belong to our ELITE programme for dynamic 
private companies; and we also enable the issuance  
of corporate bonds by smaller companies.
The Guidance is intended to help both companies  
that have a long history of ESG reporting and those 
that are less experienced in it.
ESG data and information can be provided by a company 
to a wide range of stakeholders. This Guidance is 
specifically focused on the dialogue and information 
flows between issuers and investors.
In dealing with good practice in voluntary reporting  
to investors, the Guidance is in line with the UN-backed 
Sustainable Stock Exchanges initiative model guidance 
for exchanges6. We believe that it is time to move 
beyond the debate around mandatory versus voluntary 
reporting. Issuers should now focus on innovation and 
relevance in the information they provide to investors 
– and ESG is part of that picture.
 “ESG reporting is not just for 
larger companies. This is about 
all issuers, regardless of size, 
reporting relevant and material 
information to investors so that 
they can make better informed 
investment decisions.”
Mark Zinkula
CEO, Legal & General Investment Management
Towards deeper 
understanding 
between issuers  
and investors
4

Reporting 
formats
How should ESG  
data be reported?
Page 28
Debt finance
What should debt 
issuers report and  
what are the emerging 
standards here?
Page 40
Regulation  
and investor 
communication
How can companies 
navigate regulations and 
communicate effectively? 
Green Revenue 
reporting
How can issuers get 
recognition for green 
products and services?
Page 36
5 6 7 8
Page 32
Revealing the full picture
ESG reporting priorities
7
ESG reporting 
priorities
We have identified eight  
priorities for ESG reporting.
Strategic 
relevance
What is the relevance  
of ESG issues to business 
strategy and business 
models?
Page 8
Global 
frameworks
What are the most 
important ESG reporting 
standards?
Page 22
Investor 
materiality
What do investors  
mean by materiality?
Page 12
Investment  
grade data
What are the essential 
characteristics of  
ESG data?
Page 18
1 2 3 4
Revealing the full picture
ESG reporting priorities
6

Investors want to understand 
how issuers are responding to 
long-term and macroeconomic 
trends such as climate, 
demographic and technological 
change as well as political 
developments. A number of  
the world’s largest investors are 
allocating capital to companies 
that are well equipped to 
benefit from the transition to 
the green economy, and wish to 
protect their portfolios against 
downside environmental, social 
and governance (ESG) risks.
As an issuer, you should explain the relevance of  
ESG factors to your business model and strategy. You 
should make clear how your company is positioning 
itself, either to benefit from these factors or to manage 
and mitigate the risks associated with them.
Issuers should also explain how they intend to  
access the new opportunities and revenue streams 
generated by green and socially beneficial  
products and services.
Revealing the full picture
01. Strategic relevance
9
01
Revealing the full picture
01. Strategic relevance
Strategic relevance
What is the relevance of ESG  
issues to business strategy  
and business models?
8

11
Revealing the full picture
01. Strategic relevance
GREEN ECONOMY 
EXPLAINED
Over the last 300 years there have been a 
number of economic cycles as new industries 
have emerged and revolutionised economies 
both nationally and globally. Previous cycles 
have been linked to the introduction of the 
steam engine, electricity, mass automation, and 
recently information technology and computing. 
A number of economists now suggest that we 
are rapidly moving into the next cycle of 
economic change linked to industrial changes  
to overcome climate change, environmental 
erosion and resource depletion. The Paris 
Agreement that entered into force in November 
2016, marked an important turning point.  
It aims to ‘keep a global temperature rise this 
century well below 2 degrees Celsius above 
pre-industrial levels and to pursue efforts to 
limit the temperature increase even further  
to 1.5 degrees Celsius’. Achieving its goals by 
meeting the signatories’ nationally determined 
contributions (‘NDCs’) requires the growth of  
new products and new ‘green’ industrial sectors 
in areas including renewable energy, energy 
efficiency, waste processing and recycling.  
The green economy encompasses these sectors 
and services, and companies that demonstrate 
their contribution to the green economy are 
attracting investment.
How ESG issues can impact 
business models and strategies
The ESG issues and trends that can have a powerful 
impact on business models are varied. Some possible 
examples include:
—
— a confectionery company that sources cocoa from 
West Africa explaining their readiness for increased 
levels of drought;
—
— an integrated oil and gas business explaining how 
carbon costs and changing energy demands linked 
to carbon intensity would impact their reserve 
portfolio and how future pricing scenarios link into 
their exploration and production strategy; and
—
— a professional services outsourcing firm outlining  
the increasing international demand for highly skilled 
staff and explaining their approach to motivating, 
retaining and developing their workforce in order  
to reduce high turnover rates of skilled staff.
 “Sustainability factors, such as 
climate change or demography, 
impact companies’ operating 
environments. It is therefore 
critical that companies provide 
a clear strategic view on the 
likely impact of such trends  
or factors on their business 
models. This will allow investors 
to understand how they  
are positioned, and provide 
conﬁdence that they are 
resilient and can where possible 
exploit opportunities from  
a changing environment.”
Steve J. Berexa
Global CIO Equity and Global Head of Research, 
Allianz Global Investors
It is important for any company to be able to explain 
how its core business models and strategies may be 
impacted by ESG trends, and how it is seeking to 
position itself either to benefit from them or manage 
and mitigate risks associated with them. This provides 
the context for ESG reporting and allows investors to 
assess how well prepared the company is strategically 
for changes in its operating environment.
A number of the world’s largest investors are allocating 
additional capital to companies that have higher green 
revenue exposure or are better equipped to fulfil 
sustainable goals.
Demonstrating resilience as well as readiness to 
transition to a sustainable and green economy is 
relevant for issuers across a number of industries and 
sectors. This means looking beyond the risks to new 
opportunities and revenue streams generated by green 
and socially beneficial products and services. These  
can drive value for the organisation and provide social 
and environmental solutions.
Integrating both financial and non-financial 
performance requires leadership and support from  
the Board and senior management. They play a central 
role in integrating sustainability into the business 
strategy, overseeing implementation across the 
business and communicating to investors. At a working 
level in larger companies, investor relations, finance 
functions and CSR or sustainability divisions will need  
to align to ensure the quality and consistency of 
information reported.
10
Revealing the full picture
01. Strategic relevance

Revealing the full picture
Strategic relevance
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02. Investor materiality
13
To understand a company’s 
long-term prospects, investors 
will focus on those issues  
that they believe to be most 
relevant – or ‘material’ – to any 
particular business. However, 
different investors inevitably 
have different views on what 
they see as material.
Issuers should explain which ESG issues they see as 
most relevant or material to their business. They should 
explain how ESG issues may affect their business, e.g. 
through legislation, reputational damage, employee 
turnover, licence to operate, legal action or stakeholder 
relationships. They should then explain how these 
impacts may affect business strategy and financial  
and operational performance.
When presenting this information to investors, it is 
important to understand what information and data 
your investors are looking for. This should include 
ensuring you are informed about what your industry 
peers globally are reporting on.
Revealing the full picture
Strategic relevance
Revealing the full picture
02. Investor materiality
12
02
 
What do investors  
mean by materiality?
Investor materiality

“One size does not ﬁt all when  
it comes to ESG data. Although 
there is a need for consistency, 
there is also a need to focus on 
investor materiality to ensure 
that the data being reported  
is of relevance to investors.”
James Bevan
CIO, CCLA Investment Management
Revealing the full picture
02. Investor materiality
How to identify  
material ESG themes
There is no standard template for a successful 
materiality assessment and issuers need to find the 
approach that is appropriate for their organisation. 
There are a number of considerations that can help 
companies identify what is relevant to their business 
and what the critical issues are to report on:
	
Align with what international standards 
recommend and peer companies report. This 
facilitates comparability for investors globally.
	
Use tools at your disposal. ESG research  
and index providers have specific criteria  
and identified material themes for different 
companies and industrial sectors. FTSE Russell,  
a London Stock Exchange Group business, has  
a well developed model which may be helpful  
in this regard. See more on pages 50 and 51.
	
Explicitly link ESG performance, business 
strategy and financial and operational 
performance.
14
 ‘MATERIALITY’  
DEFINED
The International Accounting Standards Board 
defines ‘material’ information as that which 
could, if omitted or misstated, influence the 
economic decisions of readers relying on the 
financial statements. The UK FRC’s ‘Clear & 
Concise’ guidance to narrative reporting states 
that ‘information is material if its omission or 
misrepresentation could influence the economic 
decisions shareholders take on the basis of the 
annual report as a whole’.
Example
Index membership: FTSE 100
ICB subsector: Recreational Services
A FTSE 100 company in the travel and leisure 
sector conducts a materiality assessment every 
two years. This allows the business to update  
its understanding of the issues that influence 
stakeholder (including investor) perceptions and 
decision-making, and to respond effectively to 
sustainability-related opportunities and risks.
Its materiality assessment process involves:
— re-evaluating the previous assessment;
— reviewing relevant standards;
— engaging with internal  
and external stakeholders;
— benchmarking the strategy against industry 
and broader corporate best-practice; and
— reviewing operational impacts and 
sustainability trends.
The full list of issues is plotted on a matrix based 
on significance to the business and relative 
concern to stakeholders.
Index membership: FTSE Small Cap
ICB subsector: Software
A small-cap software business has a strong 
reliance on employees, reflected in its vision:  
‘To enable outstanding people to create digital 
solutions that have a positive impact on people’s 
lives.’ Noting that employee retention is a key 
risk, the company includes data on its staff 
attrition rate and its ‘Best Companies to Work 
For’ rating in its KPIs.
1
2
3

1. CLIMATE CHANGE
The investment case
Investors often want to understand whether businesses can:
—
— successfully respond to climate change risks;
—
— demonstrate future viability and resilience; and
—
— achieve cost savings through efficiencies and identify opportunities  
through green revenue opportunities.
The sources of investment risks
Key sources of investment risk and opportunity:
—
— regulatory: standards, taxes, carbon pricing;
—
— market: reduced demand for high-carbon goods, products and services  
and decreased capital availability for high carbon products;
—
— market: increased demand for low-carbon goods, products and services;
—
— capital: increased capital availability for low-carbon services  
and technologies; and
—
— weather: natural disasters and resource risks.
Example indicators of practice and performance
Type
Description
Applicability
Quantitative
Three years of total energy consumption data
All
Quantitative
GHG emissions per megawatt-hr
Conventional 
Electricity
Qualitative
Board oversight of climate change:
a. Evidence of board or board committee 
oversight of the management of climate 
change risks
b. Named position responsible at Board Level
All
 3. HUMAN RIGHTS & COMMUNITY
The investment case
Investors want businesses that:
—
— engage in active discussion around human rights and community issues;
—
— demonstrate operational robustness and reputational resilience by 
addressing their impact on the communities in which they operate; and
—
— Have strong and positive relationships with communities.
The sources of investment risks
Key sources of investment risk and opportunity:
—
— regulatory: costs associated with regulatory compliance;
—
— market: increased exposure to human rights risks in supply chain;
—
— reputation: risks caused by community relations and human rights  
issues; and
—
— operations: increased chance of operational shut downs or revocation  
of licenses, if the local community resists or protests the presence  
of the business.
Example indicators of practice and performance
Type
Description
Applicability
Qualitative
Stakeholder engagement to verify 
human rights risks and impacts:
a. Evidence of consultation taking place
b. Documented meetings OR reports  
of how results have been used
All
Qualitative
How the issuer addresses freedom  
of expression through:
a. Having a statement/policy
b. Being a member of a relevant 
industry initiative such as the  
Global Network Initiative
Broadcasting &  
Entertainment, Media 
Agencies, Publishing, 
Fixed Line Telecomm- 
unications, Mobile 
Telecommunications, 
Computer Services, 
Internet, Software
Qualitative
Total amount of corporate or group 
donations/community investments 
made to registered not-for-profit 
organisations
All
The ‘Exposure’ factor in  
FTSE Russell’s ESG Ratings
The ESG Ratings service operated by FTSE Russell 
identifies 14 Themes spread across the three  
ESG pillars, most of which include several 
relevant quantitative indicators. Its methodology 
includes ‘Exposure’, which categorises the 
materiality of the 14 Themes for a particular 
company as High, Medium, Low or Not 
Applicable. Based on a matrix, this categorisation 
considers business involvement across different 
countries and sectors; utilises a variety of robust, 
globally-accepted frameworks; and can help 
issuers discern which ESG Themes they are 
exposed to, and how to begin reporting on them. 
This can form a starting point for the potential 
ESG themes an investor may regard as  
material for a company.
 2. TAX TRANSPARENCY
The investment case
Investors often want to understand whether businesses can:
—
— not only comply with tax arrangements, but also have a strong governance 
process and transparency around their tax policy and tax arrangements; and
—
— demonstrate commitment to transparency by engaging with stakeholders  
and the public to communicate their contribution to local economies.
The sources of investment risks
Key sources of investment risk and opportunity:
—
— regulatory: risks of increased regulation which could close particular tax 
arrangements, referred to by some as ‘loopholes’ which would mean reduced 
margins and profitability of particular companies. In some cases it may  
even affect a company’s ability to operate in certain markets; and
—
— reputational: increased scrutiny of corporate tax behaviour.
Example indicators of practice and performance
Type
Description
Applicability
Qualitative
A policy OR commitment to:
a. Tax transparency or tax responsibility
b. Align tax payments with revenue-generating 
activity, or reduce or refrain from the use  
of offshore secrecy jurisdictions for the 
purposes of tax planning
All
Qualitative
Board has oversight of tax policy:
a. Evidence of board oversight of the 
management of tax risks
b. Named position responsible at Board level
All
Quantitative
Disclosure of corporation tax paid globally:
a. With at least domestic and  
international breakdown
b. With country by country breakdown
All
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02. Investor materiality
ESG Rating
FTSE Russell has drawn from global standards and frameworks in the  
development of its ESG model. The model involves producing an overall ESG  
Rating based on the three pillars of Environment, Social and Governance and  
on 14 Themes adapted to reflect their materiality to each company.
Three of the 14 Themes are shown opposite to outline selected examples  
of the ESG data – both qualitative and quantitative – that issuers can  
be expected to disclose against specific, material themes. For more details  
on the methodology please see www.ftserussell.com/esg
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03. Investment grade data
19
When using ESG data to  
inform capital allocation and 
investment decision-making, 
investors want ESG information 
to be complete, consistent, 
reliable, comparable and clear.
Issuers should ensure that the data they provide  
is accurate, timely, aligned with the issuer’s fiscal year 
and business ownership model (i.e. aligned boundaries), 
and based on consistent global standards to facilitate 
comparability.
Raw as well as normalised data should be provided,  
and your company should offer a balanced view that 
highlights both positives and negatives in its 
performance.
To provide investors with a greater degree of confidence 
in their reported data, some issuers choose to have 
their ESG data assured.
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03. Investment grade data
03
Investment  
grade data
What are the essential  
characteristics of ESG data?
18

Revealing the full picture
03. Investment grade data
Timeliness
It is best practice to provide ESG data at the same  
time as the annual report and accounts are published, 
or as soon as possible afterwards.
A company may need to communicate sooner when  
a significant incident or controversy has taken place, or 
has been alleged. In these situations, investors do not 
expect to wait for the next annual reporting cycle.
External assurance
As an issuer you may seek to strengthen the credibility 
of your ESG data through external assurance. This can 
be conducted through the same processes as financial 
reporting, using qualified auditors. We recommend  
that the levels, scope and process adopted for external 
assurance are clearly described in the report.
Balance
Issuers should provide an objective picture of  
their performance, presenting both favourable and 
unfavourable information clearly and in full to aid  
the reader’s understanding. Efforts to avoid or obscure 
certain information or aspects of performance will 
inevitably lead to questions from investors and may 
create an environment of mistrust.
Data on more difficult subjects should be set  
out alongside explanations and commentary. Where 
influenced by unfavourable occurrences or market 
conditions, a full explanation detailing organisational 
learning and changes resulting from the experience  
will reassure investors.
 “We are active users of ESG  
data in our investment process. 
The quality of data provided  
by issuers has improved and  
we would like to see momentum 
continue and build. ESG data 
inﬂuences how we invest.  
We therefore need companies  
to report on ESG with the same  
level of diligence, controls and 
precision as they do for the data 
provided in their annual report 
and accounts.”
Trevor Green  
Head of UK Equities, Aviva Investors
21
INVESTMENT  
GRADE DATA FOR  
SMALLER ISSUERS
The importance of providing investors with 
investment grade data applies to smaller issuers 
too, as the quality of this information informs 
investment decision-making.
Smaller issuers should aim to follow the seven 
criteria described in this chapter, taking a 
pragmatic approach where necessary. For example, 
ESG data collection systems and processes may 
be inadequate at first; however, it is better to start 
reporting and to improve systems over time  
than not to report at all.
Example
Index membership: FTSE 100
ICB subsector: Industrial & Office REITs
A FTSE 100 Real Estate Investment Trust (REIT) 
reports its ESG performance data online, and 
through its annual reporting. The business’ 
sustainability strategy prioritises job creation, 
efficient use of natural resources and sustainable 
design, and its data disclosure aligns with these 
focus areas, offering highlights, raw numbers 
and discussion around performance.
As environment and energy data is considered to 
be of particular importance, the business reports 
against frameworks published by the Climate 
Disclosure Standards Board (CDSB) and the 
European Public Real Estate Association (EPRA). 
These standards commit them to reporting 
emissions both in absolute terms and in a format 
that enables investors to compare their data  
with others in the sector.
The company also provides a dedicated PDF 
presenting its environmental and energy data  
on an absolute and like-for-like portfolio basis for  
its properties, with comparisons to previous years. 
They also offer an energy reporting methodology 
document that explains their approach, 
boundaries, scope, reporting period, targets  
and measures. This data is also included in the 
‘Business Analysis’ section of their annual report, 
with accompanying discussion and trend data.
Revealing the full picture
03. Investment grade data
Characteristics of investment grade data
Accuracy: deploy rigorous data collection systems
Boundaries: align to the fiscal year and business 
ownership model
Comparability and consistency: use consistent 
global standards to facilitate comparability
Data provision: provide raw as well as normalised data
Timeliness: provide data to coincide with the annual 
reporting cycle
External assurance: consider strengthening  
the credibility of data by having it assured
Balance: provide an objective view, including both 
favourable and unfavourable information
Accuracy
As an issuer, you should have rigorous data collection 
systems and processes for ESG. When preparing data 
collection, you should pay particular attention to:
—
— Internal systems: assess the ability of existing 
systems (for example internal audit and risk and 
data control verification systems) to support  
data collection;
—
— Internal assurance: establish strong internal 
assurance processes, including having these 
overseen by or under the governance of the board 
audit committee;
—
— Data quality: ensure that the quality of the  
data collected and reported is understood and 
documented. Issuers should collate information on 
how the data was compiled, what assumptions were 
made, and whether any uncertainties or limitations 
apply to the data. Data sources must be appropriate, 
reliable and evidenced. Any data challenges should 
be identified and the implications assessed;
—
— Data reliability: this should be tested through 
internal reviews and conducted by internal audit. 
Issuers can also consider engaging third-party 
assurance providers; and
—
— Assumptions: report key assumptions that  
underpin reporting.
Boundaries
Issuers need to take account of two distinct sets  
of boundaries: timeframes and operations.
— Timeframes: ESG data should match your fiscal 
year and hence match the time period for the annual 
report. This allows investors to cross-use the two 
different data sets, for example normalising certain 
ESG data by revenues or staff numbers.
— Operations: ESG data should cover 100% of the issuing 
entity and employ the same principles as financial 
data. If your company has partial ownership of certain 
subsidiaries (perhaps without operational control),  
the data should be reported on a percentage ownership 
basis in order to accurately reflect the proportional 
exposure the company has to these businesses, unless 
national reporting rules have different requirements.  
In situations where parts of the business were acquired 
or sold during the reporting period, data should be 
provided on both a consolidated and separate basis.
Comparability and consistency
In order to allow comparability between peers, it is 
important to use consistent global standards when 
reporting. Issuers should use indicators and metrics that 
are widely used within their sector, aiming to gather data 
in line with common practice and to report in a similar 
manner to sector peers. Issuers should consider using 
standard denominators when normalising data.
The methods used to collect and calculate data should 
remain consistent year-on-year. If data compilation 
methodologies or underlying assumptions change, 
issuers need to explain the changes that have been 
made. Where these changes have had a significant effect 
on results, data for previous years should be recalculated 
using the new methodology or assumptions to  
enable comparison.
Data provision
Generally, investors will prefer to normalise ESG  
data themselves so that they can apply their models 
consistently across companies. They therefore expect 
issuers to provide raw as well as normalised data. 
However, issuers should be aware of ways they can 
support investors in using and interpreting the results:
—
— Contextual data: investors are interested in putting 
data into context. Companies can help by providing, 
in a readily accessible manner, measures of 
financial activity such as turnover, the countries and 
markets in which they operate, the number of staff 
and contractors and, where relevant, the quantity, 
weight or volume of product outputs;
—
— Normalised data: interpretation of progress  
around targets that are set on a normalised basis 
can be useful for investors. This should be provided 
alongside – not instead of – raw data; and
—
— Explanation: issuers should supplement 
quantitative data with narrative explaining the 
factors that have influenced performance, whether 
positively or negatively. Further, where there are 
core business differences or client segments that 
explain performance relative to peers, these  
should also be explained.
20

Revealing the full picture
04. Global frameworks
23
To anyone unfamiliar with  
ESG reporting, the volume of 
standards, frameworks and 
data requirements can seem 
overwhelming. Even for more 
experienced issuers, it can  
be a challenge to identify  
the indicators and standards  
which are most relevant to 
their investors.
While we are some way from a global consensus  
on reporting standards, the frameworks developed by 
the following organisations (in no specified order) are 
the ones most widely cited by investors: the Global 
Reporting Initiative (GRI), the International Integrated 
Reporting Council (IIRC), the Sustainability Accounting 
Standards Board (SASB), the UN Global Compact, the 
CDP (formerly the Carbon Disclosure Project), the 
Climate Disclosure Standards Board, and the FSB Task 
Force on Climate-Related Financial Disclosures.
FTSE Russell has consolidated indicators from  
different global standards and developed an Exposure 
framework. This identifies indicator applicability  
for different types of company based on industrial  
and geographic presence.
Revealing the full picture
04. Global frameworks
22
04
Global frameworks
What are the most important  
ESG reporting standards?

“Consistent global 
frameworks provide an 
essential tool to allow 
investors to analyse and 
compare ESG risks across 
companies and sectors.”
Rod Paris
CIO, Standard Life Investments
Example
Index membership: FTSE MIB
ICB subsector: Utilities
A utility group operating in Europe and Latin 
America has significant exposure to stakeholders 
whose support is critical to its license to operate. 
The company addresses this challenge by  
clearly identifying and disclosing both the  
most significant ESG issues and its stakeholder 
engagement process, and by rigorously 
organising its sustainability report around the ESG 
issues thus identified. The company’s progress  
on its sustainability plan is mapped against the 
Sustainable Development Goals throughout the 
report. The report is prepared in compliance with 
GRI G4 guidelines (“in accordance – core option”), 
with references to this standard clearly guiding 
the reader through the various sections. ESG 
information is externally verified through limited 
assurance by independent auditors.
Revealing the full picture
04. Global frameworks
Despite the improvements in the quality and quantity  
of ESG data being provided by companies, this data 
continues to be regarded as difficult to compare. We are 
in the middle stage of global standardisation, with many 
organisations – standard setters, issuers, investors – 
defining what it is they need from ESG data, how this 
data is to be used, how its quality is to be assured,  
and how it is to be presented or reported.
Progress on standardisation will help to move 
sustainability into the mainstream dialogue between 
issuers and investors. Increasing use of global standards 
and frameworks by companies has a key role to play  
in making information more available, consistent and 
reliable. For example, according to KPMG’s 2015 Survey  
of Corporate Responsibility Reporting, 61% of European 
corporate responsibility reporters used the GRI 
framework7. Furthermore, 93% of FTSE 100, 64% of the 
FTSE 350 and 45% of the top 100 on Borsa Italiana 
reported to CDP on climate change8.
24
The leading global  
ESG frameworks
CDP (formerly the Carbon Disclosure Project)
CDP collects standardised information from 
companies on climate change and the use  
of natural resources such as water and  
soft commodities.
www.cdp.net
Climate Disclosure Standards Board (CDSB)
The CDSB Framework helps companies explain 
how environmental matters affect their 
performance and show how they are addressing 
associated risks and opportunities to investors 
in annual or integrated reports.
www.cdsb.net
Global Reporting Initiative (GRI)
GRI Sustainability Reporting Standards are  
the most widely used standards for reporting on 
ESG impacts globally, and have been developed 
over many years through multi-stakeholder 
contributions. GRI Standards aim to meet the 
information needs of all stakeholders, and the 
modular structure supports both comprehensive 
reports and selected disclosures.
www.globalreporting.org
Integrated reporting
The Integrated Reporting Framework helps 
companies to produce a concise, investor-focused 
report that looks at an issuer’s performance  
and prospects through the lens of six ‘capitals’ 
(financial, manufactured, human, natural, 
intellectual, social and relationship).
www.integratedreporting.org
Sustainability Accounting  
Standards Board (SASB)
SASB issues sustainability accounting standards 
that help public corporations disclose material 
and decision-useful information to investors in 
their mandatory filings, based on their industry, in 
line with the notion that under existing regulation 
material information should be disclosed in the 
Forms 10-K or 20-F.
www.sasb.org
UN Global Compact (UNGC)
The Global Compact requires companies  
to commit to a set of ten universal principles 
concerning human rights, labour, environment 
and anti-corruption.
www.unglobalcompact.org
 61
%
of European sustainability 
reporters use GRI

Revealing the full picture
04. Global frameworks
27
The task force’s recommendations very closely align  
with our Guidance for ESG Reporting although the scope 
of our guidance is more broadly applicable across all ESG 
Themes. Whilst the TCFD is focused on material risks and 
opportunities from climate change and the transition  
to a green economy many of its principles are 
applicable to other sustainability themes too.
Recommendations
The task force recommends that climate-related 
financial disclosures should be made in public financial 
filings such as annual reports. They believe that  
since climate change often poses material risks their 
framework provides a useful basis for complying  
with legal obligations in many jurisdictions, for listed 
companies to disclose material risks. To ensure robust 
information the task force recommends governance 
controls such as review by Chief Financial Officers and 
audit committees. The task force recommendations set 
out ‘Principles for Effective Disclosures’ which closely 
align with those set out here in Chapter 03, Investment 
Grade Data.
The more specific disclosures that are recommended 
fall into four categories; Governance, Strategy, Risk 
Management and Metrics & Targets. The task force 
high level specific disclosure recommendations  
are summarised in the table above across all four  
of these categories.
These disclosures above are relevant across all 
industrial sectors. The task force has also developed 
much more sector-specific guidance set out for the 
following industries and groups:
— Financials: Banks, Insurance Companies,  
Asset Owners, Asset Managers; and
— Non-Financials: Energy, Transportation,  
Materials and Buildings, and Agriculture,  
Food and Forest Products.
The task force also places some importance on scenario 
analysis and has published a technical supplement 
setting out the use of scenario analysis, related 
considerations, analytical choices, climate-related 
scenarios and use of leading public climate scenarios.
LSEG welcomes the TCFD recommendations
London Stock Exchange Group welcomes these 
recommendations and sees them as an important step  
in driving improved global consistency in voluntary global 
reporting standards. Please review the full guidance  
on www.fsb-tcfd.org
The recommendations have many implications for  
our business: for our own reporting as a listed company, 
for our work with issuers including this Guidance, and  
for our information services to investors, including 
benchmarks. LSEG and FTSE Russell, in particular, intend 
to play a critical role enabling the flow of information 
envisioned by the TCFD. FTSE Russell’s Climate Change 
Criteria (which form part of the ESG Model) in many 
cases map to the recommended disclosures, and as an 
immediate step, FTSE Russell is reviewing them closely 
to identify new indicators and to align existing ones.  
The TCFD also cover disclosure of opportunities related 
to green products. This supports FTSE Green Revenues 
data model and aligns with Chapter 07 of this 
Guidance. LSEG is also well positioned to support and 
facilitate the further refinement of metrics through 
collaboration with issuers and investors, and looks 
forward to exploring with the TCFD how to support  
this important work.
TCFD recommendations and supporting recommended disclosures
Governance
Strategy
Risk management
Metrics and targets
Disclose the organisation’s 
governance around climate-
related risks and opportunities
Disclose the actual and potential 
impacts of climate-related  
risks and opportunities on  
the organisation’s businesses, 
strategy and financial planning
Disclose how the organisation 
identifies, assesses and manages 
climate-related risks
Disclose the metrics and targets 
used to assess and manage 
relevant climate-related risks  
and opportunities
Recommended disclosures
a.	Describe the board’s oversight 
of climate-related risks and 
opportunities
b.	Describe the management’s 
role in assessing and 
managing climate-related  
risks and opportunities
Recommended disclosures
a.	Describe the climate-related 
risks and opportunities the 
organisation has identified 
over the short, medium  
and long term
b.	Describe the impact of  
climate-related risks and 
opportunities on the 
organisation’s businesses, 
strategy and financial planning
c.	Describe the potential  
impact of different scenarios, 
including a 2°C scenario, on 
the organisation’s businesses, 
strategy and financial planning
Recommended disclosures
a.	Describe the organisation’s 
processes for identifying and 
assessing climate-related risks
b.	Describe the organisation’s 
processes for managing 
climate-related risks
c.	Describe how processes  
for identifying, assessing and 
managing climate-related  
risks are integrated into  
the organisation’s overall  
risk management
Recommended disclosures
a.	Disclose the metrics used  
by the organisation to assess 
climate-related risks and 
opportunities in line with its 
strategy and risk management 
process
b.	Disclose Scope 1, Scope 2,  
and if appropriate, Scope 3 
greenhouse gas (GHG) 
emissions, and the related risks
c.	Describe the targets used by 
the organisation to manage 
climate-related risks and 
opportunities and performance 
against targets
This information  
is based on the TCFD 
recommendations  
for consultation that 
were published in 
December 2016. The 
final recommendations 
are expected to be 
published in June 2017.
Revealing the full picture
04. Global frameworks
26
The UN Sustainable 
Development Goals
The 17 Sustainable Development Goals – and 169 
associated targets – were adopted by the General 
Assembly of the United Nations in September 2015  
to inform a global action plan on ‘people, planet and 
prosperity’ through to 2030. The value of the framework 
that the SDGs set out lies in its universality and bottom-
up nature, reflecting the fact that it stems from an 
agreement reached after a long process of international 
negotiations and consultations involving governments, 
businesses and civil society.
The 17 SDGs can provide a useful and internationally 
recognised framework to shape and prioritise business 
plans and associated reporting. They are consistent  
with a number of the leading global ESG reporting 
frameworks9 and are reflected in a growing number  
of ESG assessment frameworks including FTSE Russell’s  
ESG Ratings Model. Measuring progress against relevant 
sustainable development goals and targets enables  
the harmonisation and comparability of sustainability 
investments and actions on a global scale.
A summary of the SDG framework is presented  
graphically. For more information, please visit the  
UN Sustainable Development Knowledge Platform  
at https://sustainabledevelopment.un.org
The Financial Stability Board 
Task Force on Climate-related 
Financial Disclosures
Background
In December 2016 the Financial Stability Board Task 
Force on Climate-related Financial Disclosures (TCFD) 
published its recommendations. This initiative was  
set up following a request from the G20 in order  
to avoid potential negative impacts on the stability  
of financial markets.
The rationale for this was that appropriate disclosures 
were needed for financial firms to manage and price 
climate risks and to take lending, investment or 
insurance underwriting decisions based on their view  
of low carbon economy transition scenarios. Effective 
disclosure of climate-related financial risks will help 
avoid an abrupt repricing of risk and impacts on 
market stability.
The task force has developed a set of recommendations 
for consultation that aim to support consistent, 
comparable, reliable, clear and efficient climate-related 
disclosures by financial and non-financial companies. 
New contributions  
to global standards
Among the frameworks which are likely to define the 
next decades of global reporting and disclosure are:
— the Sustainable Development Goals (SDGs)  
specified in the UN’s ‘2030 Agenda for Sustainable 
Development’; and
— the recommendations of the Financial Stability 
Board’s Task Force on Climate-Related Financial 
Disclosures.
Although coming from very different directions and 
starting points, both initiatives could play a significant 
role in the global harmonisation of ESG measurement 
to the benefit of both issuers and investors.

Revealing the full picture
05. Reporting formats
29
Companies can report ESG 
information in their annual 
report, in a standalone 
sustainability report or in an 
integrated report. The choice of 
reporting formats may involve 
trade-offs between breadth  
and depth, between focusing 
on material issues and covering  
a wider horizon that addresses 
the relationship between ESG 
and business strategy. It is 
often unclear which of these  
is most useful to investors.
Issuers can take practical steps to ensure that their ESG 
disclosures are relevant to their investors. You can ensure 
that your reported data is of investment-grade quality, 
set out your views on materiality, and explain the 
strategic relevance of these ESG issues to your business.
There are different advantages to each type of reporting, 
and each issuer should consider which approach will best 
suit their own needs and those of their investors.
Remember that reporting is just one part of the wider 
dialogue you have with your investors. You should  
see ESG reporting, irrespective of the specific format,  
as providing a basis for dialogue with your investors, 
not as a replacement for this dialogue.
05. Reporting formats
Revealing the full picture
28
05
Reporting formats
How should ESG data be reported?

An end to survey fatigue
Publishing well considered reports that provide high 
quality ESG information and data, and placing other 
relevant information such as policies online, will make  
it increasingly feasible for you to point those requesting 
responses to ESG surveys towards your published 
materials instead.
Optimising communication
There are a number of steps that you can take to 
ensure your report is of the greatest possible value  
to investors:
	
Separate out policies,  
processes and methodologies
	
– Annual or sustainability reports featuring  
large amounts of detail around policies and 
methodologies can obscure new information 
and key messages; and
	
– Incorporate standing information (‘boilerplate’) 
repeated every year in an appendix or separate 
document, and signpost it from the report.
	
Make it easy to find and access
	
– Ensure that the report is prominent. Promote  
it on the corporate website, including the 
investor relations section, include a link within 
news releases to the markets and summarise 
findings in investor presentations; and
	
– Provide data in spreadsheet format, hyperlink  
to corresponding financial statements, or further 
ESG information if producing a report online. 
Data can also be tagged in XBRL, so that it can 
more easily be pulled out and aggregated by 
specialist applications. XBRL is a type of 
extensible markup language used for organising 
and defining financial data in a standardised 
way, applying tags to unify and compare 
different accounting standards.
	
Consider language
	
– Ensure the language used, and its accessibility, 
meet the needs of your investor base.
	
Combine data tables and  
include historical information
	
– Retain three to five years’ worth of historical 
information and data. Where there are significant 
corporate changes such as acquisitions and 
de-mergers, the reports and information 
pertaining to the previous entities should  
also be retained wherever possible.
Revealing the full picture
05. Reporting formats
31
Reporting as a complement  
to dialogue
Reports enable public distribution of ESG information 
concurrently to all existing and prospective investors. 
This can complement direct dialogue with investors and 
also provide a basis for such dialogue – something which 
can in turn help shape and determine the content of 
future reports. In other words, high quality reporting 
should support deeper and more effective direct dialogue 
with the investor community, not replace it.
1
2
3
4
Example
Index membership: FTSE Italia Small Cap
ICB subsector: Industrial Goods & Services
A mid-cap manufacturer of components for 
household appliances listed on Borsa Italiana’s 
premium segment STAR has adopted the IIRC’s 
reporting format for its annual report, published 
both in Italian and English. The business  
strategy is broken down into the forms of  
capital suggested by the Integrated Reporting 
Framework. It also adopts GRI standards for 
materiality analysis and KPI disclosure with  
three year data series provided for each KPI.  
The intellectual capital section includes detailed 
research and development indicators, in line with 
the emphasis placed on innovation and intangible 
assets described in the company’s business 
model. The governance section is also well 
developed to meet STAR investors’ expectations  
of a strong sustainability dimension.
Revealing the full picture
05. Reporting formats
Annual report, standalone 
sustainability report,  
or integrated report?
Annual report
It is increasingly common for larger listed companies 
to include explicit references to ESG themes within 
their annual reports.
The integration of ESG issues into annual reports  
allows the process of gathering and verifying this data 
to be integrated into the processes and information 
controls that are already in place. It also means that 
ESG data is readily available to investors at the same 
time as wider information about the company.
In practice, due to concerns about length and 
complexity, companies tend to discuss relatively  
few ESG issues in their annual reports. In addition, 
ESG-related content may not fit the flow and structure  
of the annual report. These issues can be addressed by 
publishing methodologies, policies and historical data 
online, leaving just the key information pertaining  
to the previous year and to future strategies, plans  
and targets in the annual report.
Standalone sustainability report
Introducing a standalone sustainability or CSR report  
is an approach favoured by many issuers. In 2015,  
726 non-financial reports were published in the UK  
and 309 in Italy10.
These reports provide a clear ‘home’ for ESG content, 
consolidating the information in a single location.  
In addition, a standalone sustainability report does not 
necessarily need to align with the style of the annual 
report; issuers can adopt a style of presentation for raw 
data, tables and charts best suited to ESG information.
The separation can imply that sustainability information 
is considered separate from the core business of the 
company. This can be addressed by aligning key areas of 
the annual report and sustainability report. For example, 
if a performance trend or external driver is highlighted  
in the annual report, it should also be addressed in  
the standalone sustainability report.
Integrated report
The concept of an integrated report is that ESG 
information and data are presented in an integrated 
manner within the annual report. This model has been 
promoted by the International Integrated Reporting 
Council (IIRC) and aims to offer investors a more 
rounded, concise and holistic insight into business 
performance and impact over the short, medium  
and long term.
Integrated reporters should beware of the implications  
of reducing the information made available to 
investors. Although brevity is welcomed by many 
investors and enables a focus on the most business 
critical ESG areas, it may mean that investors do not 
get the breadth of information they need. Investors  
are diverse and have different ESG needs. Some of 
them review published reports directly, whereas  
others access company information (including within 
analytics, research tools and indexes) through third 
party data and research providers and index providers. 
This means that data needs to be easily collectable  
by these intermediaries – and as a result, integrated 
reporting should be supplemented by additional,  
more detailed ESG information delivered via the 
company’s website or through associated published 
data appendices.
30
THE DIFFERENT  
FORMS OF ‘CAPITAL’
Capitals (also referred to as ‘resources and 
relationships’) are stocks of value or assets that 
can be enhanced, or diminished, by the activities 
of a business. The International Integrated 
Reporting Council lists six capitals in its 
framework:
— Financial: internal and external funds 
available to a business;
— Manufactured: for example, buildings, 
equipment and infrastructure;
— Intellectual: knowledge-based intangibles,  
for example brands and patents;
— Human: people and their capabilities  
and experience;
— Social and relationship: stakeholder  
and network relationships; and
— Natural: environmental resources, such as air, 
water and land.

Revealing the full picture
06. Regulation and investor communication
33
The volume of regulation 
concerning ESG reporting  
has increased substantially  
in recent years. If regulators  
in different countries and 
regions set different reporting 
requirements and standards, 
this can be problematic for 
both issuers and investors.
As a result of this level of activity in ESG reporting,  
over 80% of the world’s top economies by GDP in 2016 
mandated ESG reporting in some form10. Well-crafted 
disclosure regulation can aid issuers and investors by 
improving data consistency, availability and reliability, 
and by helping focus attention on key ESG issues.
Issuers should see regulation as a starting point  
for reporting. However, rather than taking a minimum 
compliance approach, you should use regulatory 
requirements as an opportunity to develop an investor-
focused approach to reporting. It is important that,  
as an integral part of the reporting you’re required  
to produce, you identify and report on what you  
see as your most material issues.
32
06. Regulation and investor communication
Revealing the full picture
06
Regulation  
and investor 
communication
How can companies navigate 
regulations and communicate 
effectively?

Revealing the full picture
06. Regulation and investor communication
Key ESG reporting regulations: Italy, the UK and the EU
14
Country
Institution
Year
Title
Type
Status
Commentary
Italy
Market 
Participants 
Associations & 
Borsa Italiana 
2015
Italian Corporate 
Governance Code
Non-Government 
Suggested 
Corporate 
Governance 
Disclosure, 
Voluntary
Issued
The Italian Corporate Governance 
Committee included ESG risks and 
governance considerations in its 
review of the Code issued in July 2015.
Italian 
Government
2007
Legislative decree 
No.32/2007 
transposing directive 
2003/51/CE and 
Article 2428 of the 
Italian Civil Code
Government 
Imposed Corporate 
Environmental 
Disclosure, 
Mandatory
Issued
States that directors’ reports should 
include financial and non-financial 
key performance indicators relevant to 
the specific business of the company, 
including information relating to 
environmental matters.
UK
FRC
1992, most 
recently 
updated  
in 2016
UK Corporate 
Governance Code
Industry Body  
Led Corporate 
Governance 
Disclosure,  
‘comply or explain’
Issued
For Premium companies listed on  
the Main Market, the code sets out 
standards of good practice in relation 
to board leadership and effectiveness, 
remuneration, accountability and 
relations with shareholders, on a 
comply-or-explain basis.
UK Government
2015
Modern Slavery Act
Government 
Imposed Corporate 
Environmental 
Disclosure, 
Mandatory
Issued
Section 54 of the Modern Slavery Act 
2015 requires certain organisations  
to develop a slavery and human 
trafficking statement each year.
UK Government
2006, 
revised 
2013
Changes to the 
Companies Act 2006 
(Strategic Report 
and Director’s 
Report) 2013
Government 
Imposed Corporate 
Environmental 
Disclosure, 
Mandatory
Issued
Carbon emissions, human rights and 
diversity reporting required by all listed 
companies in the Director’s Report.
All EU 
member 
states
National 
governments
2016
Transposition of the 
EU Non-Financial 
Reporting Directive 
95/14
Government 
Imposed Corporate 
Environmental 
Disclosure, 
Mandatory
Issued
Applies from January 2017 to all  
listed companies with more than 500 
employees, and mandates disclosure 
of environmental, social (including 
diversity and human rights) and 
anti-corruption issues.
— Transposed in the UK through the 
Companies, Partnerships and Groups 
(Accounts and Non-Financial 
Reporting) Regulations 2016 n. 1245
— Transposed in Italy through 
Legislative Decree 30 December 
2016 n. 245
35
Getting value from regulation
Rather than taking a minimum-compliance approach, 
issuers should use the regulatory requirements as an 
opportunity to enhance their reporting to investors.
It is critical to move beyond the areas covered in 
regulation and towards identifying your business’s most 
material ESG themes and the underlying indicators 
based on global standards. Only then will you be able to 
produce ESG reporting that aligns closely with your own 
material issues, and that enables a richer data flow  
and dialogue with investors to take place.
Going forward, we may see the financial community 
sharing the responsibility of disclosing alignment with 
ESG considerations. Article 173 of France’s Energy 
Transition for Green Growth Law which came into effect 
in early 2016 requires investors to outline how they 
factor ESG criteria into their investment decisions. As 
this effectively forces ESG engagement and integration 
from both sides, it adds still more momentum to the 
drive for consistency, standardisation and recognition 
of the global context influencing reporting.
Revealing the full picture
06. Regulation and investor communication
Governments around the world, responding chiefly  
to broader societal awareness around sustainability,  
have introduced a number of mandatory reporting 
instruments. In just three years, over 100 new mandatory 
instruments have been introduced across 64 countries11.
As a result of this level of activity in ESG reporting,  
over 80% of the world’s top economies by GDP in 2016 
mandated ESG reporting in some form11.
However, this can often mean that companies will face 
differing requirements, while investors will be unable  
to compare data on companies globally.
Reporting standards are still evolving and whilst issuers 
need to report in a way that is consistent with regulatory 
reporting requirements, they can also innovate and 
should aim to report in a manner that is most useful  
to investors. This can sometimes mean going above 
and beyond regulation.
UK and Italian regulation
The 2015 update of the Italian Corporate Governance 
Code, which is applied on a comply-or-explain basis, 
recommends that the boards of listed companies 
should take into account any risk that may affect the 
sustainability of the business in the medium-long term 
when assessing the company’s risk profile. In addition, 
the Code recommends that the largest companies, 
namely the constituents of the FTSE-Mib index, should 
consider whether or not to set up a board committee 
tasked with supervising sustainability issues related  
to the company’s business.
The UK governance and reporting framework12 
encourages reporting of ESG and non-financial matters 
through the Guidance on the Strategic Report and 
Corporate Governance Code requirements for disclosure 
of principal risks and uncertainties and a viability 
statement. The 2013 updates to the UK Companies  
Act 2006 included a number of ESG reporting provisions.  
UK incorporated quoted companies i.e. those with equity 
shares listed on London Stock Exchange Main Market, 
EEA regulated, NYSE or NASDAQ, are expected to explain 
how they are managing issues such as environmental 
performance, human rights, social and community 
involvement and diversity. They are also expected to 
report on certain statistics, for example Scope13 1 and  
2 CO2 emissions and gender diversity at Board, senior 
management and whole-company levels.
Requirements differ for companies of different sizes 
and listed status. For example while all companies are 
expected to disclose principal business risks, medium-
sized companies are not expected to include an 
analysis of non-financial KPIs. Furthermore, only listed 
companies are required to contain an overview of the 
business strategy and model as well as environment, 
employee, social, community, human rights and 
diversity information in the strategic report.
EU regulation: the Non-
Financial Reporting Directive
The aim of the EU non-Financial Reporting Directive 
(NFRD) is to establish a minimum standard for ESG 
reporting across the EU. The Directive requires the largest 
companies to report on environmental matters, social 
and employee affairs, human rights and anti-corruption 
and bribery issues. National governments transposed  
the Directive into national law in 2016.
The UK’s implementation of the EU Non-Financial 
Reporting Directive builds on earlier provisions to 
require companies and groups with over 500 employees 
that are classed as public interest entities (i.e. entities 
whose activities are of significant interest to the public, 
and include banks, insurers and quoted companies) to 
disclose a fuller range of non-financial information in 
their strategic reports. This requires eligible companies 
to disclose information on environmental, employee, 
social and human rights. The framework also requires 
disclosures on anti-corruption and anti-bribery matters. 
There is a further requirement for quoted companies to 
include a description of their diversity policy and how  
it has been implemented or to explain why one is  
not relevant.
If the company does not have a policy in relation  
to any of these matters the company should provide  
a clear and reasoned explanation as to why it would 
not be relevant. The first reports under the new 
requirements should be published in 2018, for financial 
years commencing in 2017. There is flexibility on  
how to report and companies can draw on relevant 
international, European or national guidelines.
The Italian transposition of the Directive in addition 
requires issuers to adopt global standards wherever 
possible, or to explain why the company decided to 
develop its own disclosure approach. Disclosure has  
also to cover a minimum set of parameters, including 
energy use from renewable and non-renewable sources, 
impact on health and safety, and measures aimed at 
implementing international gender diversity frameworks. 
The non-financial statement can be part of the annual 
report, or be a separate document, and it has to be 
externally verified either by the company’s legal  
auditors or by an auditing firm specially appointed.  
The statement has to be submitted to the Italian capital 
markets authority Consob, who is also in charge of 
monitoring compliance.
34
 100+
mandatory 
reporting 
instruments have 
been introduced 
across 64 
countries10

37
Revealing the full picture
07. Green Revenue reporting
Around the world, investors 
want to understand issuers’ 
exposure to green products  
and services. However, there is 
limited consistent information 
available on how issuers are 
deriving revenue and growth 
from providing environmental 
solutions.
As an issuer you should proactively communicate  
your exposure to the green products and services  
that enable the transition to the green economy.  
To do this, you need to identify the parts of your 
business that manufacture or provide goods, products 
and services delivering environmental solutions, 
quantify the associated revenues, and talk about  
how your investments in innovation and R&D will  
drive your business’s future growth.
36
07. Green Revenue reporting
Revealing the full picture
07
Green Revenue 
reporting
How can issuers get recognition  
for green products and services?

“Certain segments of global  
markets will undergo significant 
change as the world moves towards  
Green Revenues. Companies that 
offer comprehensive reports  
on the environmental solutions 
they provide, send a strong signal 
to capital markets that they are 
aware of the business opportunities 
that come with long term trends 
like the transition to Green 
Revenues. Companies disclosing 
their ‘green revenues’ can benefit 
through greater investment from 
funds such as ours.”
Maurice Versaevel
Investment Strategist, PGGM
RENEWABLE FUNDS
An emerging asset class associated with the 
transition to a green economy is represented 
by renewable infrastructure funds. Renewable 
infrastructure funds listed on London Stock 
Exchange are worth a combined £3.4bn and 
have raised £2.7bn since 2013. For investors to 
be able to report on the impact of these funds 
on the exposure of their portfolios to the green 
economy, clarity and details regarding the type  
of assets these funds are invested in are extremely 
useful. These could include the renewable energy 
generation capacity and the equivalent estimated 
GHG emissions avoided through the infrastructure 
projects that are financed or in which the funds 
are invested.
Revealing the full picture
07. Green Revenue reporting
38
Climate risk and rewards
Investors need to understand how companies in  
their portfolios are changing their exposure to green 
revenues subsectors and therefore need issuers to 
provide more detailed revenue breakdown, at a green 
sub-segment level, to measure this. Some of the world’s 
largest investors are actively allocating additional 
capital to companies with higher green revenue 
exposure; so better reporting can directly lead to greater 
investment flows. This requires you as an issuer to:
	
Understand opportunities in the  
transition to a green economy
	
Identify parts of the business that manufacture 
or provide goods, products and services driving 
value for the business and delivering 
environmental solutions.
	
Identify green revenues
	
Provide details of the revenues resulting  
from ‘green’ goods, products and services.
	
Connect to your own climate impacts
	
Ensure that reporting on green revenues is 
integrated with both wider financial reporting 
and with carbon strategy, emissions data  
and performance reporting.
	
Talk about where the future lies
	
Discuss how investment in innovation and  
R&D will support the transition to a green 
economy.
FTSE Green Revenues  
data model
FTSE Green Revenues data model measures the 
green revenues of over 13,000 public companies 
globally across 60 subsectors; from advanced 
battery and solar panel manufacture to flood 
defence construction. For the full list of 
subsectors, see Appendix ii.
Example
Index membership: FTSE 100
ICB subsector: Speciality Chemicals
A UK chemicals company breaks its revenues  
into specific sub-segments, enabling investors to 
understand precisely how much of those revenues 
make a contribution to the green economy.
For example, it has a segment named ‘Precious 
Metal Products’, which it breaks down into two 
sub-segments, ‘Recycling’ (revenue gained from 
providing recycling services) and ‘Other activities’ 
(revenue gained from refining and developing 
paint coats and other products). This allows 
investors to see that the recycling segment 
contributes to the green economy, whereas  
the ‘Other activities’ do not. Each of these 
sub-segments is furnished with a separate 
published calculation sheet.
Index membership: FTSE 100
ICB subsector: Fixed Line Telecommuniactions
A FTSE 100 telecommunications company has 
reported its aim as being to ‘have helped our 
customers cut their carbon emissions by at least 
three times our own end-to-end carbon impact’ by 
2020. This 3:1 ambition is based on the company’s 
products and services having a carbon abatement 
effect at least three times the impact of its own 
emissions (Scope 1, 2 and 313).
By quantifying and reporting the abatement 
affects of products such as video-conferencing 
and cloud computing services, the business 
demonstrates how it is not only prepared for the 
transition to the green economy but will benefit 
directly as a result.
1
2
3
4

41
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08. Debt finance
Investors are increasingly 
interested in the ESG 
characteristics of fixed income 
issuers. They recognise these 
issues as sources of risk and of 
opportunity. In addition, with 
the growth of the green bond 
market, investors are also 
interested in financing that  
is linked to specific activities  
and projects delivering 
environmental benefits.
The rest of this Guidance is also applicable at an  
entity level to issuers of bonds considering their ESG 
reporting. Issuers may also wish to consider issuing 
green bonds to access new sources of capital. However, 
this requires a number of criteria to be satisfied. 
Issuers need to ensure that proceeds are fully directed 
towards green projects, that there are clear criteria  
for project selection and evaluation, that proceeds  
are only used for green projects, and that information 
on the use of proceeds is published regularly.
To be included on the London Stock Exchange  
green bond segment, an issuer also needs to use  
an external reviewer.
40
08. Debt finance
Revealing the full picture
08
Debt finance
What should debt issuers  
report and what are the  
emerging standards here?

“We see ESG factors as very important investment 
considerations in all asset classes: green bonds is a 
way for issuers to show investors that they hardwire 
ESG into the capital structure. As such, we look not 
only into expanding green bond exposure per se,  
but also to issuers that issue green bonds.”
Ulf Erlandsson
Senior Portfolio Manager, AP4
Example
Index membership: FTSE Small Cap
ICB subsector: Waste & Disposal Services
A FTSE Small Cap company active in the waste 
management sector publishes a corporate 
responsibility report that analyses the 
environmental and social performance of  
its business by operating divisions, based on  
GRI standards. A very clear summary table  
of performance indicators and five-year targets  
is followed by deep-dive sections dedicated  
to environmental performance (30 KPIs),  
Health & Safety (8 KPIs) and people (17 KPIs).  
All narrative sections clearly identify the link 
between specific sustainability themes and the 
company’s business model. More detailed KPIs 
are provided in a separate document available 
online, which also reports on the use of the 
proceeds raised through a green bond issuance. 
The report describes the initial proposed 
allocation of funds to the sustainable projects 
specified in the green bond issuance documents, 
and the actual allocation of funds. For every 
project an overview of the associated 
environmental benefits is provided.
42
08. Debt finance
Revealing the full picture
As investors increasingly need ESG information at 
entity level for all corporate bond issuers, the previous 
sections of this Guidance are also relevant for fixed 
income issuers. However, the data needs are likely to be 
subtly different for bond investors, especially with regard 
to materiality. The materiality lens for a bond investor  
is typically tighter than for equities, as only ESG factors 
that could potentially impact the likelihood of a bond 
issuer paying interest or capital repayment at the end  
of the bond’s duration would be material, while for  
equity investors a wider range of factors can impact 
company value and share price returns.
Standards for information on fixed-income reporting 
are also developing around green finance through the 
relatively new concept of green bonds. The standards 
for green bonds relate to reporting on the use of 
proceeds with respect to positive green impacts. There  
is also the early emergence of social bonds which,  
in a similar manner, consider the use of proceeds  
with respect to positive social impacts.
Green bonds: bringing  
green finance to scale
There is significant momentum behind ‘green bonds’ 
– fixed-income instruments that are designed to help 
fund environmentally friendly projects. Major global 
institutions, industry bodies and policy makers, 
including the G20, have backed the development  
of this market. In June 2015, London Stock Exchange 
(LSE) became the first exchange globally to launch  
a comprehensive dedicated green bond offering.
To be admitted on these segments, issuers are required 
to submit an external review document verifying the 
‘green’ nature of the bonds. Ongoing disclosure and 
impact reporting are also encouraged to enable investors 
to make their own investment assessments regarding 
these instruments.
The UK already has some of the highest standards  
of disclosure and regulatory oversight. Not only does  
this benefit issuers by associating them with a strong 
reputation for quality, but it benefits investors too – 
ensuring greater transparency. The additional 
certification on the green bond segments is vital to 
attracting more investors who can then have confidence 
in the integrity of the bond and its green proceeds.
The first green bond in London was listed in 2012 by  
the Nordic Investment Bank. As of January 2017, there 
were 40 green bonds listed across LSE’s Main Market  
and Professional Securities Market (PSM). Issued by  
15 different institutions, including supranationals, local 
governments and municipalities as well as corporates, 
they have raised over $10.5bn in seven currencies 
through a range of transactions, many of which are world 
firsts in terms of currency, geography or structure.
According to the Climate Bonds Initiative’s State  
of the Market 2016 report15, over $42bn of green bonds 
were listed in 2015. Furthermore, 82% of the green 
bond market is investment grade (BBB rated or higher) 
and more than half of that is AAA rated.
In parallel to this sharp growth, concerns have arisen 
about definitions and transparency. Which projects 
meet sufficiently ‘green’ standards? How can investors 
be sure that their funds will achieve impact?
There are emerging approaches to meeting this need  
for clarity in the market. The biggest step came with 
the publication of the Green Bond Principles in 2014.
Focusing on transparency and disclosure, these aim  
to provide issuers with the key components required  
for listing on the green bond market.
 82
%
of the green bond market 
is investment grade  
(BBB rated or higher)
G20 Green Finance  
Study Group (GFSG)
Chaired by China and the UK, the G20’s Green 
Finance Study Group convenes a group of 
countries and institutions including the United 
Nations Environment Programme to explore  
the potential for green finance to contribute  
to sustainable development, overcome barriers  
and create an enabling environment for change. 
China is one country transforming its financial 
system to facilitate green instruments, including 
green bonds, green credit, green equity index 
products and carbon finance.

Revealing the full picture
08. Debt finance
45
 ‘Climate-aligned’ bonds
According to the Climate Bonds Initiative’s State of  
the Market 2016 report, ‘climate-aligned’ bonds have 
reached a total value of $694bn. These bonds include 
not just labelled green bonds but those that are 
financing low-carbon and climate adaptation 
infrastructure, and are issued by companies with over 
95% of revenue derived from climate-aligned assets.
Social bonds
ICMA and the Green Bond Principles have published 
guidance for issuers aiming to finance projects with 
social objectives. Focused on populations that are living 
under the poverty line, excluded, and/or vulnerable,  
social projects can include providing development 
infrastructure and services such as sanitation, clean 
drinking water, affordable transport, education and 
healthcare as well as affordable housing, employment 
projects, food security and socioeconomic advancement.
As with green bonds, social bond issuers should  
apply the four core components of the GBP (use of 
proceeds, process for project evaluation and selection, 
management of proceeds, and reporting), and  
external reviews.
Charity bonds
In July 2014, London Stock Exchange launched  
a dedicated ‘retail charity bond’ segment on the 
Order book for Retail Bonds (ORB) in response to 
increased investor demand for instruments with 
an ethical impact. ORB is London Stock Exchange’s 
flagship electronic retail bond market, offering 
issuers a primary market for the issuance and 
distribution of retail-eligible bonds as well as a 
liquid, transparent secondary market for investors. 
A total of 56 dedicated issues raised approximately 
£6bn between 2010 and 2016.
In June 2015, in order to support future issuances, 
London Stock Exchange waived admission fees 
for charity bonds issued on ORB. Since the launch 
of the retail charity bond segment, London Stock 
Exchange has welcomed three Retail Charity 
Bonds raising a total of £68m. Issuers include 
Golden Lane Housing, Hightown Housing 
Association and Charities Aid Foundation.
08. Debt finance
Revealing the full picture
44
Green Bond Principles – what investors need to know
The Green Bond Principles (GBP) define green bonds 
as ‘any type of bond instrument where the proceeds 
will be exclusively applied to finance or re-finance  
in part or in full new and/or existing Green Projects… 
and which are aligned with the four core 
components of the GBP’.
GBP core components can be summarised as:
1. Use of proceeds – measuring green impact
Proceeds should be fully directed towards ‘Green 
Projects’. That is, they will address key areas of 
environmental concern such as climate change, 
evolution of natural resource depletion, biodiversity 
loss and/or pollution.
These categories are purposefully broad and  
non-exhaustive. The GBP’s website provides examples 
on what projects qualify, but acknowledges that 
definitions can vary.
2. Process for project evaluation and selection
Issuers should be transparent in how they determine 
the eligibility of their projects, outlining how they will 
meet critical environmental sustainability objectives.
In practice, this means articulating targets for  
the environmental benefits that the projects will 
achieve, for example reductions in CO2 and  
water emissions.
3. Management of proceeds
Issuers should transparently track net proceeds, 
allocating them in a segregated sub-account, 
sub-portfolio or otherwise. The Principles recommend 
auditing as an additional level of robustness.
Alignment with this Component requires 
confirmation that the proceeds from the green 
bond are used only for the nominated projects.
4. Reporting
Information on the use of proceeds, including the 
amounts allocated at project level and the impacts 
achieved and expected, should be published annually 
until full allocation and processing thereafter.
Overall, issuers are recommended to use an external 
reviewer. The external review can take the form  
of a consultant review, verification, certification,  
and/or rating.
Transparency and access to information are  
central to mobilising private sector money and 
mainstreaming environmental risks. One of the 
great challenges for green bonds is the further 
development of impact reporting standards as 
there are no universally agreed metrics or formulas 
for quantifying or calculating the environmental 
impact of the underlying projects.
Climate Bonds Initiative
Climate Bonds Initiative is an investor-focused, 
not-for-profit organisation whose purpose is to 
mobilise capital markets for climate change 
solutions. Its Climate Bonds Taxonomy has been 
one of the first attempts to provide broad guidance 
for prospective green bond and climate bond issuers 
and investors by encouraging common definitions 
across global markets, in a way that supports the 
growth of a cohesive thematic bond market. Eight 
specific ‘climate bond’ sectors have been identified 
for which detailed eligibility criteria have been 
developed. Sector specific standards currently exist  
for solar, wind, low carbon economy buildings, 
geothermal and low carbon economy transport 
whilst standards for water, bioenergy and 
agriculture and forestry are also under 
development. The Climate Bonds Standard (v2.0), 
which fully integrates the Green Bond Principles, 
consists of a certification process, pre- and 
post-issuance requirements and a set of sector-
specific eligibility and guidance documents. Bonds 
are accorded the status of Certified Climate Bonds 
when they are verified as adhering to the Climate 
Bonds Standard, providing investors with assurance 
about their contribution to the delivery of a  
green economy.
The certification process is summarised as:
1.	 Identify qualifying projects and assets,  
based on the Climate Bond Standards criteria;
2.	 Arrange an independent review; and
3.	 Track and report; the value of the assets must 
stay equal to, or greater than, the value of the 
bond, and reporting to investors must take  
place each year.

Revealing the full picture
How LSEG supports ESG reporting and communication
47
	
Capacity building and supporting issuers  
in reporting:
	
– We provide training, including through our 
Academy, and host events that clarify good 
practice in corporate reporting;
	
– Through our unique open access technology 
platform ELITE Connect, we allow listed 
companies to manage their local and global 
investor relations efforts and to improve their 
communications with their shareholders and 
intermediaries. This platform enables issuers to 
showcase their company story and ESG activities 
through digital meetings and webcasting;
	
– In 2000 Borsa Italiana established the STAR 
segment which includes mid-cap companies 
with high corporate governance standards; and
	
– Borsa Italiana regularly organises thematic 
road shows to facilitate dialogue between listed 
companies and investors. Sustainability topics 
are increasingly part of these initiatives.
	
Profiling issuers on our markets with green  
or other sustainability attributes:
	
– London Stock Exchange has developed one  
of the world’s first green bond segments based 
on strict admission criteria to support the 
growth of this market segment; and
	
– On Borsa Italiana, listed companies can include 
information on sustainability strategies, targets 
and performance as an integral part of their 
company profiles.
	
Providing investors with ESG data,  
analytics and indexes:
	
– FTSE Russell has pioneered ESG indexes for over 
15 years since the launch of the FTSE4Good 
Index Series and now provides a comprehensive 
range of ESG ratings and data;
	
– We collect ESG data from public sources  
and contact over 4,000 companies to check 
that information with them directly;
	
– We track the proportion of companies’ revenues 
that derives from products and services serving 
the transition to a green economy through FTSE 
Green Revenues data model; and
	
– We support stock exchanges including Madrid, 
Johannesburg and Malaysia in creating 
dedicated ESG indexes for their markets.
	
Contributing to global policy  
development and dialogue
	
– We contribute to consultations on ESG reporting. 
Recent responses have included those regarding 
the EU Non-Financial Reporting Guidance, the 
FSB Task Force on Climate-Related Financial 
Disclosures, the United States Securities and 
Exchange Commission’s consultation on material 
disclosures, and the UK Government consultation 
on the amendments to the Companies Act;
	
– We play an active role in a number of global 
associations including the UN-backed PRI  
and Sustainable Stock Exchanges initiative, 
bringing together a wide range of sustainable 
investment association;
	
– We promote good standards in the UK and set  
the Italian corporate governance code. In 2016, 
we published ‘Creative Tension? 25 Years On’,  
a collection of essays on corporate governance 
by leading industry figures; and
	
– We convene market participants, issuers  
and investors to improve data, dialogue, and, 
ultimately, capital flows.
How LSEG supports ESG  
reporting and communication
Beyond its contribution to public policy discussions on driving 
global standardisation of ESG reporting, LSEG supports issuers  
and investors in making ESG communication effective.
1
2
3
4
Investors want to understand how well companies  
are managing the risks associated with ESG issues, 
seeing this as a key test of management quality.  
They are also interested in the opportunities presented 
by the green economy – and increasingly, they are 
allocating capital to companies that are well equipped 
to benefit from this.
To respond to the growing interest, issuers should 
provide investment-grade data and information. 
Specifically, they should:
	
Explain the relevance of environmental, social 
and governance factors to their business models 
and strategy. These factors should not be 
‘bolt-on’ but an integrated component of 
business drivers and considerations.
	
Explain how ESG issues may affect their business, 
e.g. through legislation, reputational damage, 
employee turnover, licence to operate, legal action 
or stakeholder relationships, and how these 
impacts may affect business strategy and  
financial and operational performance.
	
Explain how they intend to access the new 
opportunities and revenue streams generated  
by green and socially beneficial products and 
services. In this context they should explain how 
their investments in innovation and R&D will 
drive future growth for the business.
With data on ESG data now frequently being used alongside 
other financial and strategic information in investment analysis 
and decision making, there is a compelling case for companies 
strengthening their reporting and communication by 
incorporating ESG issues.
Summary
Revealing the full picture
46
Summary
	
As the most important part of the above, identify 
the parts of the business that manufacture or 
provide goods, products and services delivering 
environmental solutions and supporting the 
transition to a green economy; and break down 
and quantify the associated revenues.
	
Provide data that is accurate, timely, aligned with 
their fiscal year and business ownership model, 
and based on consistent global standards  
to facilitate comparability.
	
Recognise that reporting is just one part of  
the wider dialogue they have with their investors. 
ESG reporting, irrespective of the specific format, 
provides a basis for dialogue with investors but  
is not a replacement for it.
1
2
3
4
5
6

49
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Appendices
48
Appendices
Revealing the full picture
Appendices

Revealing the full picture
Appendices
51
Indicator 
sub code
Indicator description wording
Basic  
Materials
Consumer 
Goods
Consumer 
Services
Financials  
(& Real Estate)
Health Care
Industrials
Oil & Gas
Technology
Telecomm- 
unications
Utilities
Environmental
ECC14
Total operational GHG emissions data (Scope 1 & 2) is disclosed
ECC15
Total energy consumption data is disclosed
ECC19
Disclosure of fleet fuel efficiency data by the following countries/regions:  
USA; Japan; China; India; Brazil; Russia; Western Europe; CEE (Central and Eastern Europe)
ECC22
Disclosure of Oil & Gas Reserves by type (i.e. Proven, Probable and Possible Reserves):  
Total Oil Reserves; Total Gas Reserves; Ratio of Oil:Gas; Oil & Gas: barrels of oil equivalent of reserves
ECC23
GHG emissions per megawatt-hr
ECC30
Disclosure of coal reserves by type (Proven, Probable and Possible Reserves)
EBD11
Disclosure of certified palm oil as a percentage of total palm oil produced/used/processed
EBD12
Disclosure of certified forest products (e.g. FSC, RAN) as a percentage of total forest products produced/used/processed
EBD13
Disclosure of certified seafood (e.g. MSC, ASC) as a percentage of total seafood produced/used/processed
EPR18
Disclosure of NOX emissions (tonnes)
EPR19
Disclosure of SOX emissions (tonnes)
EPR21
Disclosure of volatile organic compounds (VOC) emissions (kilograms)
EPR24
Disclosure of hazardous waste generation (tonnes)
EPR25
Disclosure of non-recycled waste generation (tonnes)
EPR26
Disclosure of waste recycled (tonnes)
EPR27
Total costs of environmental fines and penalties during financial year
EPR28
Percentage of sites covered by recognised environmental management systems such as ISO14001 or EMAS
ESC30
Total GHG emissions data on properties disclosed
ESC31
Total energy usage data on properties disclosed
ESC32
Total water usage data from property portfolio disclosed
EWT11
Total water use / water extraction data is disclosed
EWT12
Percentage of water recycled (non-potable) for use in own operations
Governance
GAC12
Disclosure of total amount of political contributions made
GAC13
Disclosure of number of staff disciplined or dismissed due to non-compliance with anti-corruption policy/policies
GAC14
Disclosure of cost of fines, penalties or settlements in relation to corruption
Social
SHR17
Total amount of corporate or group donations / community investments made to registered not-for-profit organisations:
SHS12
Percentage of sites with OHSAS 18001 certification
SHS13
Number of staff trained on health and safety standards within the last year
SHS15
Lost-time incident rate, over last three years
SHS38
Number of work-related employee fatalities
SHS40
Number of work-related contractor fatalities
SLS24
Full-time staff voluntary turnover rates
SLS25
Percentage of employees that are contractors or temporary staff
SLS26
Amount of time spent on employee development training to enhance knowledge or individual skills, using:  
a) Total hours as a company, or b) Average hours per employee
  Likely relevance
  Possible relevance
For more details on the FTSE Russell ESG Methodology and indicators please see www.ftserussell.com/esg
Appendices
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Appendix i – Materiality by sector
Quantitative indicators to consider reporting against: These are drawn from the FTSE Russell ESG Ratings Model and 
their materiality for different ICB16 Industries is highlighted as either ‘likely’ or ‘possible’. Note that these indicators 
themselves draw from a wide variety of pre-existing established standards such as GRI and CDP.
FTSE Russell quantitative ESG data points
50

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Appendices
53
Overview
Green Revenues  
subsector
Description
Energy 
Equipment
EQ Nuclear *
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable the 
generation of power from a process of sustained nuclear fission or fusion within a controlled environment.
EQ Ocean & Tidal
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable  
the generation of power from a process of extracting kinetic energies from the motions and currents  
in ocean waters or near shore and offshore tidal currents.
EQ Solar
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
the generation of power using radiant light and heat generated by the Sun which is captured either 
via Thermal, Photovoltaic, Concentrated Array or Thin Film processes.
EQ Waste  
to Energy
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
the generation of power through the use of domestic, agricultural and commercial refuse as fuel for 
both thermal and non-thermal energy creation.
EQ Wind
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
the generation of power using the kinetic energy of the air in motion which is captured by turbines 
and other devices.
Energy 
Management
EM Combined Heat 
& Power
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
the control, direction and manipulation of energy during the power generation cycle to ensure its 
properties are maximised for the benefit of other energy processes and/or energy devices.
EM Controls
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
the control, direction and manipulation of energy control processes and/or devices.
EM Fuel Cells
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities related to 
electrochemical devices that convert chemical energy from a fuel into usable electric energy.
EM Integrated 
Energy Management
Companies whose activities include more than one EM subsector.
EM Logistics  
& Support
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that are ancillary 
to the control, direction and management of energy.
EM Power Storage
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
the efficient storage and delivery of energy.
EM Smart Grids
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable new 
and existing power delivery networks to deliver a more effective use of energy by increasing transmission 
capabilities or to integrate user functions in an intelligent basis through monitoring and management  
of usage and supply.
Energy 
Efficiency
EE Advanced 
Materials
Companies providing goods, products and services including components, specialist materials,  
bespoke manufacturing and maintenance processes, design and operational support capabilities that 
enable new lighter, stronger, longer lasting and less resource intensive or environmentally damaging 
synthetic or naturally derived materials and products to be created.
EE Buildings  
& Property
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable new 
and refurbished properties to be built, refurbished or operated on the basis that they are less resource 
intensive and also reduce their impact on the environment at all levels of their operation in accordance 
with internationally recognised standards such as ED, Energy Star and BREEAM where applicable.
EE Industrial 
Processes
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
industrial processes operated by companies to become substantially more efficient and less resource 
intensive at all levels of their operation.
EE Integrated 
Energy Efficiency
Companies whose activities include more than one EE subsector.
EE IT Processes
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
computers and IT related systems to become substantially more efficient and less resource intensive  
at all levels of their operation.
Appendix ii – FTSE Green Revenues Definitions
FTSE Green Revenues Classification System
Overview
Green Revenues  
subsector
Description
Energy 
Generation
EG Bio Fuels
Companies generating power through the use of crops, plants and other organic materials as fuels 
where the reduction of greenhouse gas emissions is a significant function of the power generation 
process either on a life-cycle analysis basis or at the point of generation.
EG Clean  
Fossil Fuels
Companies generating power using fossil fuels such as coal, oil or gas where the reduction of greenhouse 
gas emissions is a significant function of the power generation process either on a life-cycle analysis 
basis or at the point of generation through the use of external technologies.
EG Geothermal
Companies generating power through the utilisation of natural geothermal heat sources created by 
planetary accretion or radioactive decay either above or below ground where the reduction of greenhouse 
gas emissions is a significant function of the power generation process either on a life-cycle analysis 
basis or at the point of generation.
EG Hydro
Companies generating power through the management of stored or redirected water within a controlled 
environment where the reduction of greenhouse gas emissions is a significant function of the power 
generation process either on a life-cycle analysis basis or at the point of generation.
EG Integrated 
Energy Generation
Companies whose activities include more than one EG subsector.
EG Nuclear *
Companies generating power from a process of sustained nuclear fission or fusion within a controlled 
environment where the reduction of greenhouse gas emissions is a significant function of the power 
generation process either on a life-cycle analysis basis or at the point of generation. 
EG Ocean & Tidal
Companies generating power from a process of extracting kinetic energies from the motions and 
currents in ocean waters or near shore and offshore tidal currents where the reduction of greenhouse 
gas emissions is a significant function of the power generation process either on a life-cycle analysis 
basis or at the point of generation.
EG Solar
Companies generating power using radiant light and heat generated by the Sun which is captured 
either via Thermal, Photovoltaic, Concentrated Array or Thin Film processes where the reduction  
of greenhouse gas emissions is a significant function of the power generation process either  
on a life-cycle analysis basis or at the point of generation.
EG Waste  
to Energy
Companies generating power through the use of domestic, agricultural and commercial refuse as  
fuel for both thermal and non-thermal energy creation where the reduction of greenhouse gas 
emissions is a significant function of the power generation process either on a life-cycle analysis 
basis or at the point of generation.
EG Wind
Companies generating power using the kinetic energy of the air in motion which is captured by turbines 
and other devices where the reduction of greenhouse gas emissions is a significant function of the power 
generation process either on a life-cycle analysis basis or at the point of generation.
Energy 
Equipment
EQ Bio Fuels
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable  
the generation of power through the use of crops, plants and other organic materials as fuels where 
the reduction of greenhouse gas emissions is a significant function of the power generation process 
either on a life-cycle analysis basis or at the point of generation.
EQ Clean  
Fossil Fuels
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable  
the generation of power using fossil fuels such as coal, oil or gas where the reduction of greenhouse 
gas emissions is a significant function of the power generation process either on a life-cycle analysis 
basis or at the point of generation through the use of external technologies. 
EQ Geothermal
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable the 
generation of power through the utilisation of natural geothermal heat sources created by planetary 
accretion or radioactive decay either above or below ground where the reduction of greenhouse gas 
emissions is a significant function of the power generation process either on a life-cycle analysis 
basis or at the point of generation.
EQ Hydro
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable  
the generation of power through the management of stored or redirected water within a controlled 
environment where the reduction of greenhouse gas emissions is a significant function of the power 
generation process either on a life-cycle analysis basis or at the point of generation.
EQ Integrated 
Energy Equipment
Companies whose activities include more than one EQ subsector.
Appendices
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52
 * Data captured but not used in index calculations

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Appendices
55
Overview
Green Revenues  
subsector
Description
Environmental 
Resources
ER Mining
Companies providing goods, products and services derived from the ownership of mineral and ore 
extraction rights where the raw materials obtained from such minerals and ores are required as a key 
resource to enable other processes in the industrial transition to the green economy.
ER Minerals  
& Metals
Companies providing goods, products and services derived from the processing and management  
of mineral and ore based raw materials that are required as a key resource to enable other processes  
in the industrial transition to the green economy.
ER Source Water
Companies providing goods, products and services derived from the ownership or control of water 
extraction rights where such rights specifically apply controls in respect of ecosystem protection and 
the maintenance of sustainable reserves in accordance with domestic or internationally recognised 
standards where applicable.
ER Sustainable 
Forestry
Companies providing goods, products and services derived from the ownership or control of timber 
extraction rights where such rights specifically apply controls in respect of ecosystem protection and 
the maintenance of sustainable reserves in accordance with domestic or internationally recognised 
standards where applicable.
Modal Shift
MS Aviation
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that are 
specifically able to help adapt, mitigate or remediate the impact air transportation has through  
any part of its operation on climate change, resource depletion or environmental erosion.
MS Integrated  
Modal Shift
Companies whose activities include more than one TR subsector.
MS Railways
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that are 
specifically able to help adapt, mitigate or remediate the impact rail transportation has through  
any part of its operation on climate change, resource depletion or environmental erosion.
MS Road Vehicles
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that are 
specifically able to help adapt, mitigate or remediate the impact road transportation has through  
any part of its operation on climate change, resource depletion or environmental erosion.
MS Shipping
Companies providing goods, products and services including components, specialist materials,  
bespoke manufacturing and maintenance processes, design and operational support capabilities that  
are specifically able to help adapt, mitigate or remediate the impact ocean and inland waterborne 
transportation has through any part of its operation on climate change, resource depletion or 
environmental erosion.
Operational 
Shift
OS Finance  
/ Investment
Companies providing financial goods, products and services on a retail or wholesale basis to private and 
corporate clients that are differentiated from a company or industries existing business model because 
they are specifically able to help adapt, mitigate or remediate the impact of climate change, resource 
depletion or environmental erosion.
OS Integrated 
Operational Shift
Companies whose activities include more than one OS subsector.
OS Retail  
/ Wholesale
Companies providing non-financial goods, products and services on a retail or wholesale basis to private 
and corporate clients that are differentiated from a company or industries existing business model 
because they are specifically able to help adapt, mitigate or remediate the impact of climate change, 
resource depletion or environmental erosion.
OS Property
Companies providing new and refurbished commercial, residential, leisure or public buildings that can  
be operated, sold or rented on the basis that they are less resource intensive and also reduce their impact 
on the environment at all levels of their operation in accordance with internationally recognised 
standards such as ED & BREEAM where applicable.
Appendices
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54
Overview
Green Revenues  
subsector
Description
Energy 
Efficiency
EE Lighting
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
lighting equipment and products to become substantially more efficient and less resource intensive  
at all levels of their operation.
EE Video 
Conferencing
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
on demand and installed video transmission facilities to provide meeting facilities between companies 
that reduce the requirement to travel so frequently.
Environmental 
Infrastructure
EI Carbon Capture  
& Storage
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable the 
sequestration, capture, cleaning, transport and storage of Carbon Dioxide (CO2) either as an industrial 
by product or from the existing ecosystem.
EI Desalination
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable 
the conversion of salt water to fresh water so it is suitable for human, agricultural or industrial use 
through the removal of salt and/or other minerals.
EI Flood Control & 
Land Erosion
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that reduce  
or control the impact of inland or coastal flooding and increasing water levels as well as the impact  
on terrain of degradation caused by external forces.
EI Integrated 
Environmental 
Infrastructure
Companies whose activities include more than one EI subsector.
EI Logistics  
& Support
Companies providing goods, products and services including components, specialist materials, 
bespoke manufacturing and maintenance processes, design and operational support capabilities  
that are ancillary to the control, direction and management of human impacts on the environment, 
the environment’s impact on humans as well as the ecosystem’s ability to support and sustain  
the current and future populations.
EI Pollution 
Management
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable  
us to manage the negative impact of contaminants in the natural environment that cause instability, 
disorder, harm or discomfort to the ecosystem in accordance with internationally recognised 
standards where applicable.
EI Recyclable 
Products
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that specifically 
and consciously reduce the impact of human activity through the use recycled materials as the primary 
component of another product, or by enabling components to be easily recycled and/or absorbed thus 
reducing their life-cycle impact on the environment in accordance with internationally recognised 
standards where applicable.
EI Recycling 
Services
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support services that enable the 
recovery of natural resources and synthetic materials from waste created by human activity as an 
alternative and substitute to the use of raw materials in accordance with internationally recognised 
standards where applicable.
EI Waste 
Management
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that enable the 
effective management of discarded materials produced by human activity to reduce their impact on 
health and the environment in accordance with internationally recognised standards where applicable.
EI Water 
Management
Companies providing goods, products and services including components, specialist materials, bespoke 
manufacturing and maintenance processes, design and operational support capabilities that help 
establish, regulate, deliver and reduce losses in the supply of clean water for Human, Agricultural  
& Industrial consumption.
Environmental 
Resources
ER Agriculture
Companies providing goods, products and services that are specifically able to enhance the viability, 
yield, scope and sustainability of agricultural output in accordance with domestic or internationally 
recognised standards where applicable.
ER Aquaculture
Companies providing goods, products and services that are specifically able to enhance the viability, 
yield, scope and sustainability of aquacultural output in accordance with domestic or internationally 
recognised standards where applicable.
ER Integrated 
Environmental 
Resources
Companies whose activities include more than one ER subsector.

Appendices
Revealing the full picture
56
Glossary
20
Best-in-Class investment selection: Approach  
where leading or best-performing investments within  
a universe, category or class are selected or weighted 
based on ESG criteria.
Engagement and voting on sustainability matters: 
Engagement activities and active ownership through 
voting of shares and engagement with companies  
on ESG matters. This is a long-term process, seeking  
to influence behaviour or increase disclosure.
Exclusions: An approach that excludes specific 
investments or classes of investment from the investible 
universe such as companies, sectors or countries.
Impact Investing: Impact investments are 
investments made into companies, organisations  
and funds with the intention to generate social and 
environmental impact alongside a financial return. 
Impact investments can be made in both emerging 
and developed markets, and target a range of returns 
from below-market to market-rate, depending upon  
the circumstances.
Integration of ESG issues: The explicit inclusion  
by asset managers of ESG risks and opportunities in 
traditional financial analysis and investment decisions 
based on a systematic process and appropriate 
research sources Norms-based screening: Screening  
of investments according to their compliance with 
international standards and norms.
Sustainability themed investment: Investment  
in themes or assets linked to the development  
of sustainability. Thematic funds focus on specific  
or multiple issues related to ESG.
Appendix iii – ESG investors overview
The adoption of ESG approaches in investment is a growing force in global financial flows.
Due to the complexity of this market, there have been various attempts to classify investors into categories 
according to their strategy. These could be grouped according to their capital focus and motivations, from ESG-risk 
related issues only to environmental and/or social impact only. In addition, they could be classified depending 
upon how ESG is implemented. The table below outlines the commonly used categories.
Eurosif
GSIA-equivalent17
PRI-equivalent18
EFAMA-equivalent19
Exclusions
ESG Negative screening
ESG Negative /  
Exclusionary screening
Negative screening or Exclusion
Norms-based screening
Norms-based screening
Norms-based screening
Norms-based approach
Best-in-Class selection
ESG Positive screening  
and Best-in-Class
ESG Positive screening  
and Best-in-Class
Best-in-Class policy
Sustainability-themed
Sustainability-themed
ESG-themed Investments
Thematic investment
ESG integration
ESG Integration
Integration of ESG issues
–
Engagement and voting
Corporate engagement  
and shareholder action
Engagement (three types)
Engagement (voting)
Impact investing
Impact / Community investing
–
–
Acknowledgements
London Stock Exchange Group wishes to thank  
all Markets Participants, both issuers and investors, 
who have contributed their experiences, ideas and 
enthusiasm to support the development of the Guidance. 
We also wish to thank Salterbaxter MSLGROUP for their 
support in developing this report.
About London Stock  
Exchange Group
London Stock Exchange Group (LSE.L) is an international 
markets infrastructure business. Its diversified global 
business focuses on capital formation, intellectual 
property and risk and balance sheet management. LSEG 
operates an open access model, offering choice and 
partnership to customers across all of its businesses.  
The Group can trace its history back to 1698.
The Group operates a broad range of international 
equity, ETF, bond and derivatives markets, including 
London Stock Exchange; Borsa Italiana; MTS (Europe’s 
leading fixed income market); and Turquoise (a 
pan-European equities MTF). Through its platforms, 
LSEG offers market participants, including retail 
investors, institutions and SMEs unrivalled access to 
Europe’s capital markets. The Group also plays a vital 
economic and social role, enabling companies to 
access funds for growth and development.
Through FTSE Russell, the Group is a global leader in 
financial indexing, benchmarking and analytic services 
with approximately $10trn benchmarked to its indexes. 
The Group also provides customers with an extensive 
range of real time and reference data products, 
including SEDOL, UnaVista, XTF and RNS.
Post trade and risk management services are a 
significant part of the Group’s business operations.  
In addition to majority ownership of LCH, a multi-asset 
global CCP operator, LSEG owns CC&G, the Italian clearing 
house; Monte Titoli, a leading European custody and 
settlement business; and globeSettle, the Group’s CSD 
based in Luxembourg.
LSEG is a leading developer and operator of high 
performance technology solutions, including trading, 
market surveillance and post trade systems for over  
40 organisations and exchanges, including the Group’s 
own markets. Additional services include network 
connectivity, hosting and quality assurance testing. 
MillenniumIT, GATElab and Exactpro are among the 
Group’s technology companies.
Headquartered in the United Kingdom, with significant 
operations in North America, Italy, France and Sri 
Lanka, the Group employs approximately 3,500 people.
Further information on London Stock Exchange Group 
can be found at www.lseg.com
Appendix iv – References
1	
UNPRI Annual Report 2016 http://annualreport.unpri.org –  
Over 300 asset owner members and over 1,000 asset manager 
members all commit to incorporate ESG issues into investment 
analysis and decision-making across all assets.
2	
UNPRI Annual Report 2016.  
Available at http://annualreport.unpri.org/messages.html
3	
The Global Sustainable Investment Review 2014.  
www.gsi-alliance.org/members-resources/ global-sustainable-
investment-review-2014 written by the Global Sustainable 
Investment Alliance and the Japan Social Investment Forum.
4	
The 2012 ‘Short-termism, Investor Clientele, and Firm Risk. Harvard 
Business School Accounting & Management Unit Working Paper 
No. 12-072’ http://papers.ssrn.com/sol3/papers.cfm?abstract_
id=1999484. Paper by Brochet, F., Loumioti, M. and Serafeim, G.
5	
The 2015 ‘Insights from PRI Signatories’ report written by 
Accenture-UNGC in collaboration with PRI states that 38% of CEOs 
believe they are able to accurately quantify the business value  
of sustainability initiatives – yet just 7% of investors agree.
6	
Model Guidance on Reporting ESG Information to Investors,  
www.sseinitiative.org/wp-content/uploads/2015/10/SSE-Model-
Guidance-on-Reporting-ESG.pdf
7	
https://home.kpmg.com/xx/en/home/ insights/2015/11/
kpmg-international-survey-of-corporate-responsibility-
reporting-2015.html
8	
‘Out of the starting blocks: Tracking progress on corporate  
climate action’, CDP, 2016.
9	
For example see the SDG compass by the GRI together with the  
UN Global Compact and WBCSD; http://sdgcompass.org/wp-content/
uploads/2016/05/019104_SDG_Compass_Guide_2015_v29.pdf
10	 Data from Corporate Register, October 2016,  
www.corporateregister.com
11	 The 2016 ‘Carrots & Sticks’ report, https://assets.kpmg.com/
content/dam/kpmg/pdf/2016/05/ carrots-and-sticks-may-2016.pdf 
written by KPMG, GRI, UNEP and the Centre for Corporate 
Governance in Africa.
12	 FRC, UK Corporate Governance Code, April 2016.  
www.frc.org.uk/Our-Work/Publications/Corporate-Governance/
Final-Draft-UK-Corporate-Governance-Code-2016.pdf
13	 Scope 1 and 2 definitions are from the GHG Protocol  
(www.ghgprotocol.org) and are only for direct emissions and 
indirect emissions from purchased electricity and gas.
14	 Source: Global guide to responsible investment regulation,  
www.unpri.org/about/pri-teams/ policy/responsible- 
investment-regulation
15	 Bonds and Climate Change: The State of the Market in 2016. 
Climate Bond Initiative.
16	 www.icbenchmark.com Industry Classification Benchmark
17	 Global Sustainable Investment Alliance (GSIA), 2012 Global 
Sustainable Investment Review.
18	 PRI Reporting Framework, 2013 Main Definitions.
19	 EFAMA Guidance on RI information in the KIID & Post Investment 
Disclosure, 16 February 2012.
20	 European SRI Study, Eurosif (2014).