On 29 September, the FRC's Financial Reporting Lab (Lab) launched a new project focused on the production of environmental, social and governance (ESG) data. This is the first phase of a new project which will consider the:
- distribution and
of ESG data in separate phases.
The Lab has invited companies, service and systems providers, investors and other interested parties to participate in the project.
What will the project cover?
The exact scope of the first phase of the ESG data project will be discussed and agreed with those taking part. However the Lab currently expects that it will cover:
- the ESG data collected by companies — the Lab notes that it is particularly interested in understanding the data which companies collect for their internal decision-making rather than solely for external disclosure
- the methodologies which companies use to measure ESG data
- the systems used by companies to collect and produce the data
- how companies get comfort (formal or informal) on the accuracy of the data and
- the process by which that data is transformed into external disclosure which is considered is to useful by, presumably, shareholders and stakeholders
How can I take part?
Potential participants should contact the Lab at firstname.lastname@example.org by 15 November 2021.
Why is the project being launched?
The project is intended to provide participants with an opportunity to develop the systems which are required to underpin the production, distribution and consumption of ESG data and disclosures. The Lab notes that these are immature when compared with those already in place for financial information.
The real challenge may turn out to be the breadth of ESG factors and the wide variety of matters which should be considered.
Where can I find more information?
Details of the project are available at https://www.frc.org.uk/news/september-2021/frc-lab-call-for-participants-esg-data
The Lab notes that "Investors and other stakeholders are increasingly interested in disclosures on the environmental and social impact of companies’ activities and their governance arrangements."