Sustainability Disclosure Requirements (SDRs) generally refer to regulations or guidelines that mandate organisations to disclose their environmental, social, and governance (ESG) performance and impacts. These requirements aim to increase transparency, accountability, and comparability of sustainability-related information across companies, industries, and jurisdictions.
Some key points about potential Sustainability Disclosure Requirements include.
Mandatory Reporting: SDRs often involve legally mandated reporting of specific ESG-related information. These requirements may be imposed by governmental bodies, regulatory agencies, or stock exchanges.
Transparency: SDRs are designed to provide stakeholders, including investors, customers, employees, and the public, with accurate and reliable information about a company’s sustainability practices and performance.
Metrics and Indicators: SDRs may specify certain key performance indicators (KPIs) or metrics that organisations must report, such as greenhouse gas emissions, energy consumption, diversity in the workforce, supply chain practices, and more.
Materiality: SDRs typically require organisations to disclose information that is material to their business and operations. Materiality assessment helps focus on issues that are most relevant to stakeholders and the organisation’s impact.
Standardisation: Some jurisdictions or industry bodies work to standardise sustainability reporting frameworks and guidelines to promote consistency and comparability of data.
International Alignment: Efforts are being made to align sustainability reporting standards across countries to avoid fragmentation and enable international comparability.
Voluntary vs. Mandatory: SDRs can be either voluntary, where organisations choose to disclose sustainability information, or mandatory, where reporting is required by law or regulatory authorities.
Disclosure Channels: Organisations may disclose sustainability information through various channels, such as annual reports, sustainability reports, dedicated sections on their websites, and specialised reporting platforms.