A review of leading UK companies in the FTSE 350

Excellence in social reporting

This is the third year we've reviewed excellence in social reporting in the FTSE 350. Over this time, we have seen the development of internal and external stakeholder expectations surrounding the ‘S’ of ESG.

While we have seen a steady increase in social factors reflected in companies’ strategic priorities, many companies have so far struggled to bring their social reporting into a cohesive narrative rather than a series of disparate disclosures. The complexity and breadth of new regulations present both challenges and opportunities to achieve this goal.

26%

of companies have comprehensive downloadable ESG data, including social

49%

of companies have some assurance over social metrics

41%

of companies publish an ethnicity pay gap

New regulations bring complexity but also raise the bar on data quality

Regulation is a key driver for reporting for many companies. Sustainability reporting frameworks, such as the International Sustainability Standards Board (ISSB), each come with expansive disclosure requirements including around workforce.

Some large global companies will need to report under the EU Corporate Sustainability Reporting Directive (CSRD) as early as 2025. CSRD requires companies to report impacts, risks and opportunities that are material to the organisation across four stakeholder groups: own workforce, workers in the value chain, customers and community.

The reporting is vast and complex in the social space. For example, Own Workforce encompasses 51 pages of new legislation and 17 disclosure requirements including 20 quantitative metrics along with numerous policy, and stakeholder and employee consultation requirements. All of this will be subject to audit scrutiny. It is therefore vital that finance and reporting functions work alongside HR functions to determine how they will collect robust data that meets audit standards.

Better data can support better planning

All these new regulations will further push the agenda forward in the coming years. Companies should not underestimate the challenge of meeting the baseline level of reporting under these. However, there are also opportunities. Better data quality can support better planning - companies have an opportunity to bring their social agenda within, and in support of, the overall business strategy, with potential benefits for both internal and external stakeholders.

“Better data quality can support better planning - companies have an opportunity to bring their social agenda within, and in support of, the overall business strategy, with potential benefits for both internal and external stakeholders.”