In today’s investment landscape, stewardship activities have become a cornerstone for organisations aiming to foster sustainable development and maintain stakeholder trust. The essence of stewardship is to responsibly manage resources, be they environmental, social, or economic, for the benefit of future generations. However, the effectiveness of these activities hinges significantly on selecting the right topics. This blog explores the importance of topic selection in stewardship activities, its alignment with the Global Reporting Initiative (GRI) standards and how tech can be a solution to these challenges.

How to select Topics & its challenges:

Selecting the right topics is important for reporting on your Stewardship activities. Topics for stewardship activities are selected through: stakeholder engagement, materiality assessments, benchmarking industry standards, and ensuring regulatory compliance to address stakeholder concerns, align with strategic goals, manage risks, and optimise resources. Selecting the right topics for stewardship activities is crucial for addressing stakeholder concerns, aligning with strategic goals, managing risks, and efficiently allocating resources. 

The process ensures relevance, transparency, and accountability. However challenges arise due to diverse stakeholder interests, a dynamic environment, data quality issues, integration across the organization, balancing short-term and long-term goals, and ultimately regulatory complexities.  Despite these challenges, effective topic selection is crucial for the success and credibility of stewardship activities. Consequently, topic selections helps drive meaningful impact and fosters sustainable development.

The Significance of Topic Selection:

1. Relevance to Stakeholders:

Choosing relevant topics ensures that stewardship activities address the actual concerns and interests of stakeholders, including employees, customers, investors, and the community. Engaging stakeholders in identifying these topics can lead to more meaningful and impactful initiatives.

2. Strategic Alignment:

Well-chosen topics align stewardship activities with the organisation’s strategic goals. This alignment ensures that efforts in sustainability are not only beneficial for the environment and society but also contribute to the company’s long-term success and competitive advantage.

3. Risk Management:

Addressing pertinent topics helps in identifying and mitigating potential risks. Whether it’s environmental risks like climate change, social risks such as labor practices, or economic risks including supply chain disruptions, proactive stewardship can prevent or lessen these impacts.

4. Resource Allocation:

Resources are finite, and selecting the right topics ensures that they are allocated efficiently. Focusing on key areas allows organisations to achieve significant results without diluting efforts across too many initiatives.

5. Regulatory Compliance and Beyond:

Many industries are subject to regulations that mandate certain sustainability practices. By selecting topics that meet and exceed these regulations, companies can avoid legal repercussions and position themselves as leaders in sustainability.

Integrating GRI Standards:

The Global Reporting Initiative (GRI) provides a comprehensive framework for sustainability reporting that helps organisations disclose their environmental, social, and governance (ESG) performance. Aligning stewardship activities with GRI topics ensures that companies meet global standards and enhance their transparency and accountability.

1. Materiality Assessment:

GRI emphasizes the importance of conducting a materiality assessment to identify the most significant topics. This process involves engaging with stakeholders to determine which issues are most relevant and have the greatest impact on the business and society.

2. Standardized Reporting:

Utilizing GRI standards ensures that stewardship activities are reported consistently and comparably. This standardization aids stakeholders in assessing and comparing the sustainability performance of different organisations.

3. Holistic Approach:

GRI covers a broad range of topics, including environmental impacts, human rights, labor practices, and anti-corruption measures. By aligning stewardship activities with GRI topics, organisations adopt a holistic approach to sustainability, addressing multiple dimensions of their operations.

4. Enhanced Credibility:

Reporting in accordance with GRI standards enhances the credibility and reliability of sustainability disclosures. Stakeholders, including investors, are more likely to trust and value the sustainability efforts of organisations that follow globally recognized guidelines.

5. Continuous Improvement:

GRI encourages continuous improvement by requiring organisations to regularly review and update their sustainability practices. This iterative process ensures that stewardship activities remain relevant and effective in a rapidly changing world.

How Tech can help solve Topic Selection Challenges:

GRI Taxonomy provides a framework for Stewardship teams to select relevant topics to track their engagement activities. However, there is still a challenge around streamlining all topics selections. Individuals might select different topic activities depending on their own subjective understanding of the issue. This can cause problems during reporting season as your team activities might not be systemised which will lead to inaccurate Stewardship reports. This is where Tech Solutions might be beneficial for Investment teams. 

At Maanch, we’re thrilled to introduce our latest AI feature designed to streamline the ESG reporting process. This innovative tool uses artificial intelligence to automatically suggest relevant GRI, Organisation, and SFDR topics based on your issue descriptions.

Here’s how it empowers your reporting:

• Effortless Efficiency: Save valuable time by letting AI do the heavy lifting of topic identification. Eliminate manual searching and ensure you never miss a crucial topic.
• Unmatched Accuracy: Rest assured your reports cover all essential areas mandated by leading ESG frameworks and regulations.
• Deeper Insights: Gain a deeper understanding of which topics are most material to your specific sustainability efforts. Make data-driven decisions and craft more impactful reports.

If you wish to find out more about this new feature, please contact us here

Conclusion:

Selecting the right topics for stewardship activities is crucial for addressing stakeholder concerns, aligning with strategic goals, managing risks, and efficiently allocating resources. By integrating GRI standards, organisations can ensure that their sustainability efforts are comprehensive, credible, and transparent. This alignment not only helps in meeting regulatory requirements but also positions companies as leaders in the global movement towards sustainable development. Through careful topic selection with the help of AI and adherence to GRI guidelines, organisations can drive meaningful change and secure a sustainable future for all.