Proper-Reporting-Scope-and-Boundaries

Establishing accurate reporting boundaries is crucial for transparent ESG reporting. In general, there are three types of approaches to be employed to determine the reporting boundaries of your ESG report:

Operational control approach

This is the most common method as it directly reflects the actual emissions from facilities that a company operates or holds an operating license for. It provides a clear picture of the environmental impact under the company’s direct control.

Financial control approach

This approach includes all operations for which a company has the ability to direct financial and operating policies over them, and is aiming to gain economic benefits from these activities.

Equity share approach

This method accounts for emissions based on the share of equity the company holds in a given operation.

Companies often need to amend their reporting boundaries when there are significant changes in their operations. Such modifications are essential to accurately reflect their ESG performance. Recently, GreenCo assisted a company in modifying its reporting boundaries, as the company no longer holds the operating license for the facilities of a manufacturing business. Consequently, these facilities were excluded from the data collection process as well as the subsequent ESG report, so as to ensure the disclosure accurately represents the company’s actual ESG performance.

GreenCo believes that setting proper reporting boundaries not only enhances the credibility of your ESG report, but also aligns it with best practices, providing stakeholders with a true reflection of your sustainability efforts. GreenCo’s expertise ensures that your reporting boundaries are accurately set and adjusted according to significant operational changes, thereby maintaining the integrity and transparency of your reports.