The “G” in ESG is about how the company is managed and governed. This includes, among other things, the composition of the board, risk management, and transparency. Good governance builds trust and stability, both internally and externally, and is crucial for the company’s long-term success.
The most important G-metrics for SMEs are based on the VSME standard. According to the standard, you must report on the following governance areas:
Board practices concern the company’s board of directors, including its composition and function.
A well-functioning board ensures that the company complies with applicable data protection laws and regulations.
Ethics and integrity are about ensuring that the company operates responsibly and fairly.
For example, the company can establish clear guidelines and policies that include:
Implementation and compliance with policies throughout the organization
Measures to prevent and combat corruption and bribery
An important part of the “G” is being able to identify, assess, and manage the company’s risks.
In the ESG report, you should therefore describe the company’s assets, activities, and value chain to identify potential risks and assess their impact on financial performance.
This way, the company is better equipped to make informed decisions and minimize potential challenges.
It is important for a company to be open about its activities and results. One way to strengthen transparency is through an ESG report.
Transparent reporting builds trust with investors, partners, employees, and other stakeholders, while also enhancing the company’s credibility and sustainable development.
As a member of the UN Global Compact, you commit to following 10 principles regarding human rights, labor rights, the environment, and anti-corruption.
These principles are particularly relevant when preparing your ESG report and can serve as inspiration for documenting the company’s responsibilities and focus areas.
The reporting of your G-metrics should not stand alone. It adds value to complement the numbers with concrete descriptions and reflections. The content naturally depends on the results, but you can, for example, describe:
Pay gap between CEO and employees
Gender pay gap
Source: Virksomhedsguiden.dk
