This special episode of the Better Finance Podcast focuses on the importance of environmental, social, and governance (ESG) standards in finance. Marc Siegel, EY ESG Reporting Thought Leader, and Janine Guillot, CEO of the Value Reporting Foundation (VRF), discuss the role of VRF in simplifying ESG reporting and disclosure. The conversation highlights how corporations can adopt an ESG strategy, measure ESG performance using relevant metrics, and make ESG disclosures in a transparent manner. The discussion also examines the importance of involving cross-functional teams in ESG initiatives to help drive successful adoption of global ESG standards.

In 2021, the Value Reporting Foundation (VRF) was formed through the merger of the Sustainability Accounting Standards Board (SASB) with the International Integrated Reporting Council (IIRC). The integration of these two entities signalled significant progress towards the development of environmental, social and governance standards.

The SASB's comment letter to the SEC made it clear about the importance of ESG disclosure, including climate risk, in assessing financial performance and business risk. Companies should consider ESG disclosure as an essential aspect of their ESG strategy.

Europe has come out with an intent to develop European nonfinancial reporting or ESG standards, that would be applicable to companies and have asked the Financial Reporting Advisory Group to develop those standards. There is strong demand from global companies and global investors for some sort of international harmonization around standards.

The views and opinions expressed are those of the individuals and do not reflect the official policy or position of EY or any other organization.

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