The general trend and our clear recommendation is that the ESG reporting should be aligned with the financial reporting and released at the same time. This is even more important for listed companies and means that you need to start preparing for the 2021 report now!
The Norwegian Shipowners’ Association (“NSA”) recently launched its updated Guidelines for ESG reporting in the shipping and offshore industries (Oppdaterte retningslinjer for rapportering på bærekraft | Norges Rederiforbund). The new guidelines provide an update on the regulatory developments and ESG trends. There are no material changes changes compared to the previous guidelines, however the guidelines take the Norwegian Transparency Act (Åpenhetsloven trer ikraft 1.juli 2022 | MH Partners) into consideration as well as further developed requirements from the financial industry.
The guidelines state the following best practice for ESG reporting from a financial market’s perspective:
“Generally, the financial markets prefer ESG reporting that outlines clear ESG targets, performance against those targets – preferably over a 3-5 year horizon – and relevant governance information on how material issues are managed by the company.”
In line with all sustainability guidelines and standards, the starting point is to prepare a materiality analysis to define the material ESG topics for your company and your stakeholders.
The NSA guidelines recommend that shipping offshore companies as a minimum report on the following indicators:
Environment – Scope 1 GHG emissions, Carbon Intensity Indicator, GHG emission management, Energy mix, Responsible ship recycling, Number and aggregate volume of spills and releases to the environment and Waste generated. The Waste indicator is new in the updated guidelines.
Social – Lost time incident rate or Lost Time Incident Frequency, Labor rights and Port state control
Governance – Corruption risk, Fines, Policies and targets
There are also extended indicators for more advanced reporting of which Scope 3 GHG emission and Sulphur policy are new reporting indicators in the updated guidelines.
The NSA guidelines can give shipping and offshore companies a head start on ESG reporting; however it should be noted that it is not a reporting standard. The same applies for guidelines for other industries such as real estate. For more advanced reporting, and/or reporting to be audited, standards such as SASB and GRI should be considered. Do you want to discuss how to approach the 2021 Sustainability reporting, reach out for an informal discussion with us!