CPA Bulletin

www.cpa.uk.net CPA Bulletin > February 2023 29 GUEST ARTICLE: 2 Reporting Standard for Construction Plant (SRS). That way it’s created by and for the sector, it is then relevant to your sector, and the myths of mystic metrics can be discarded as you’ll know what’s being asked for, why, and how to measure and report it. An oven-ready recipe for setting an industry standard There are lessons from other sectors here that will help your sector to fast track its way to a solid standard that’s oven-ready! The key to getting this right will be drawing on external expertise on climate for example, so that it is well-informed. Essential too, is creating a critical mass to ensure you get buy-in at the sector level and adoption with sector benchmarks. Updating the standard on a regular cycle to ensure it all remains current and stretches companies to greater performance standards will be a big help too. And if you can co-invent this SRS with the lenders, it immediately eradicates any duplication of metrics and helps to cut through some of the mists which can surround the ESG ‘industry’ itself. Complying is not equal to flying All of that said, simply reporting against a standard because it is easier than doing your own metrics and keeps lenders happy is missing the whole point. Don’t be tempted to fall into a compliance merry-go-round. ESG reporting via the standard would need to clearly sit underneath, and ideally inform strategies. Good governance through effective chairs plus good boards can assimilate all the decisions and trade-offs they need to make to the strategic objective of the company. The best utility companies are clear about their public purpose and value, using ESG to check on how they are doing. Secondly, good reporting is an important component of the work of audit and risk committees but is not enough on its own. Benchmarked reports help identify strengths and weaknesses - but what a good audit and risk committee should be doing is using an ESG standard to ask questions about risks and risk appetite in the business. Become cult heroes Lastly, it’s been said before that ‘culture eats strategy for breakfast’. Where a standard could be most effective is when it is used as a tool for helping to drive change in culture. Informing and listening to staff, in particular front-line staff, and changing how the organisation works. Get the culture right, and your staff retention and productivity should soar, and you’ll look very attractive to young graduates and the next wave of the workforce. So if you want to add value to your business, improve the information you use to make business decisions, keep and attract talented staff, make borrowing cheaper and easier, and generally clarify your company’s sense of social purpose, then ESG is absolutely for you. Should you and/or the industry want more support from Sustainability First along the way, then our charity would be delighted to become a part of your ESG journeys. David Murray was one of our panel speakers at the CPA Conference 2022