Navigating ESG Reporting in Corporate Groups

Abstract

This master's thesis aims to shed light on the main complexities and barriers corporate groups are confronted with when consolidating Environmental, Social and Governance (ESG) information, including how these complexities can be constructively addressed. Using an indepth case study of an internationally leading seafood company with extensive experience in reporting on ESG, we identify complexities on various levels of the corporate hierarchy and apply a grounded theory approach to develop a comprehensive model of the challenges of ESG consolidation in large and diverse corporate groups. We propose a linear, step-by-step model for consolidation of ESG information. Initially, the process begins with materiality analysis to identify relevant data to collect, factoring in external pressures, internal priorities, and stakeholder communication to ensure adaptability and sensible prioritization. The materiality analysis sets the criteria for data collection, which is primarily challenged by its manual and time-consuming nature, along with variations in data output from diverse business unit operations. We found that automating the process and defining clear roles enhances efficiency in data collection. Following data collection, the subsequent phase involves data sharing, characterized by comprehensive sharing of data and unrevised scorecards. Standardization of parameters in reporting and regular in-person meetings play a crucial role in this phase to manage data efficiently and guarantee the visibility of all initiatives. Finally, in summarization of ESG data, our findings emphasize the criticality of openly using diverse communication channels. Open communication is essential for addressing delays and incorrect data for the continual improvement of the processes involved. The emergent model presented aims to enhance insight into the critical steps of consolidating ESG information by explaining key relationships in this process. This is done with the intent of providing a richer perspective than what already exists in today’s literature and serve practical utility for organizational application through increased understanding.