Article
Version 1
Preserved in Portico This version is not peer-reviewed
ESG Reporting and Metrics: From Double Materiality to Key Performance Indicators
Version 1
: Received: 17 October 2023 / Approved: 18 October 2023 / Online: 19 October 2023 (08:02:43 CEST)
A peer-reviewed article of this Preprint also exists.
Nielsen, C. ESG Reporting and Metrics: From Double Materiality to Key Performance Indicators. Sustainability 2023, 15, 16844. Nielsen, C. ESG Reporting and Metrics: From Double Materiality to Key Performance Indicators. Sustainability 2023, 15, 16844.
Abstract
This article conceptualises the link between firms’ value chains and distribution networks and the requirements for double materiality assessments in contemporary reporting regulations worldwide. The new European Sustainability Reporting Standards (ESRS) and the standards for sustainability reporting issued by the International Sustainability Standards Board (ISSB), called IFRS S1 and IFRS S2, require companies to report their own direct (scope 1) and indirect (scope 2) greenhouse gas (GHG) emissions as well as GHG emissions in their value chains and distribution networks (both scope 3). However, GHG emissions comprise just one dimension of information that is relevant to understand when assessing, managing and reporting the footprints and impacts of a firm and are, therefore, only a fraction of the key performance indicators (KPIs) related to ESG that should be disclosed. Through a case study, this article demonstrates the connection between the due diligence analysis of firms’ value chains and distribution networks, the analysis of the competitive parameters of the business model, the identified impacts, risks and opportunities, and the double materiality perspective. The double materiality perspective prioritises actions based on probability and significance, creating a natural space to identify KPIs. The article concludes by applying the REGS model and illustrating how it can assist firms in identifying relevant KPIs based on double-materiality assessments.
Keywords
ESG; sustainability reporting; due diligence; impact; footprint; double materiality; key performance indicators
Subject
Business, Economics and Management, Accounting and Taxation
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Comments (0)
We encourage comments and feedback from a broad range of readers. See criteria for comments and our Diversity statement.
Leave a public commentSend a private comment to the author(s)
* All users must log in before leaving a comment