The Impact of COVID-19 on Corporate Reporting
The coronavirus outbreak is unveiling the dynamic materiality of environmental, social, governance (ESG) issues. How can businesses improve their assessments and come out of the pandemic with a competitive advantage? For CSR Europe the answer lies in three opportunities: materiality assessment, materiality and integration assessment and report review.
Within three months, the coronavirus (COVID0-19) pandemic has forced businesses to rethink their materiality. Environmental, social, governance (ESG) issues such as employee health, safety & wellbeing or labour practices represented a moderate risk in the materiality assessment of most of companies. However, with the COVID-19 outbreak, these issues have become progressively more and more important as companies rushed to adopt measures to protect their people and ensure business continuity. As showed by the Coronavirus ESG monitor created by TRUVALUE LABS, what was considered immaterial has become material in a short period of time. In other words, COVID-19, highlighted the relevance of dynamic materiality for companies. What is material for a company is becoming “fluid”.
What will be the potential impact of COVID-19 on Corporate Reporting?
Evolution of Materiality Assessment to better identify dynamic ESG issues that are likely to become material for the company in the future, even in unpredictable situation.
Increased pressure on companies from Artificial Intelligence (AI) and machine learning (ML) ESG data providers to improve their materiality assessment if they want to gain competitive advantage
Increased capacity for investors to rely on real-time ESG data providers to spot inaccurate reporting and evaluate the company’s profile.
Social issues, such as labour practices and employee safety, are relevant across-industry and should be prioritized by companies in their materiality assessment.
What can your company do to prepare for these changes? CSR Europe is supporting companies in their journey to deliver a stronger assessment of ESG issues with:
Materiality Assessment - identify and assess potential ESG issues that could impact your company’s business model.
Maturity and Integration Assessment (MIA) – provides your companies with benchmark and assessment of the level of maturity and integration of your sustainability management to better understand and internally communicate areas for improvement.
Report Review – to review and assess your company’s sustainability/CSR or integrated report