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New York Stock Exchange ESG Guidance:

Best Practices for Sustainability Reporting

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The conversation in our capital markets is changing rapidly. Investors are expressing their values through investment decisions, while companies are feeling the need to serve a wider range of stakeholders. Both are emphasizing Environmental, Social and Governance (ESG) factors in how they measure success, making it critical that investors and issuers alike are fluent in the language of ESG.

This language, however, is not chiseled in stone and handed to companies and investors. It evolves every day. Much as the key financial concepts that we all agree on today — revenue, net income and assets — developed established definitions only after decades of discussion by market participants, the syntax of ESG is expanding constantly, including topics like climate impact, transition risk and diversity.

At this stage of the ESG evolution, the NYSE community plays an important role in advancing the dialogue as each company identifies the ESG issues that are the most important to its business, integrates its approach to these issues into the business strategy, and then delivers this narrative to investors and other stakeholders. This approach will shape how your company, industry and the entire business community are viewed.

For most companies, focusing on serving a broad range of stakeholder and ESG issues is not new, but telling that story might be. To help address this need, the NYSE is releasing its ESG Guidance: Best Practices for Sustainability Reporting. The information below can help you speak the language of ESG in conversations with investors and other stakeholders, even if you have never before engaged in these discussions. As with all languages, dialects arise that are specific to certain regions and topics. Some of the most important topics will be specific to your industry and the issues that it faces — for example, biodiversity and access to medicine in the healthcare space. Others will be more universal -- for example, diversity and climate change affect every industry.

These best practices represents a voluntary set of guidelines for companies; these are not listing standards, regulations or requirements. They are intended to help you make further progress, or even get started, on your ESG journey.

Over the coming months, you will continue to hear more from the NYSE team on all things ESG. Our goal is to help lower the barriers to ESG engagement with your investors, give you the tools to benchmark ESG disclosures, and connect you to ESG experts who can help at any stage in the development of your approach to ESG. We stand ready to help you tell your story, delivering the narrative that presents your company as both an investment and an organization that is living its purpose for employees, communities and greater society.

Stacey Cunningham
NYSE President


Corporations and their stakeholders are increasingly focusing on ESG and sustainability issues, including how companies manage environmental, social and governance (ESG) risks and opportunities, and how those actions contribute to their ability to generate returns over the long term, retain and attract employees and customers, and thrive in their communities.

One sign of the heightened focus on ESG issues is the growth in support for the United Nations Principles for Responsible Investment (PRI). The PRI was launched at the New York Stock Exchange in 2006. It encourages signatories (asset owners, asset managers and service providers) to incorporate ESG factors into their investment decision making processes. Since the launch, the number of signatories globally has grown from less than 100 to over 3,000, representing assets under management of over $103 trillion.1

The size of investment products claiming to consider ESG factors has also grown dramatically.2 The Global Sustainable Investment Alliance (GSIA) estimates that at the end of 2018, assets invested using sustainability approaches totaled over $30 trillion, of which just over 50% was in public equity.3 By the end of 2019, in the U.S. alone, sustainably-managed assets had grown to over $17 trillion – a 42% increase on the previous year.4

Different types of sustainable investing5

  1. Negative/exclusionary screening: The exclusion of companies, sectors or countries from the permissible investment universe if involved in certain activities e.g. controversial weapons, human rights abuses.
  2. Positive/best-in-class screening: Selecting companies from a defined investment universe based on their relative ESG performance.
  3. Norms-based screening: Screening of investments according to their compliance with international standards and norms e.g. the United Nations Global Compact.
  4. ESG integration: The explicit incorporation of ESG risks and opportunities into traditional financial analysis and investment decisions.
  5. Sustainability-themed investing: Investing with a specific emphasis on one or more sustainable development themes e.g. gender equality or climate change.
  6. Impact investing: The desire to achieve positive environmental and social impact in addition to financial return.
  7. Corporate engagement and shareholder action: Investing to facilitate engagement with company management on ESG issues. Voting on or proposing ESG-linked shareholder resolutions.

Other stakeholders, such as employees and customers, are also interested in companies’ sustainability performance and management of ESG risks and opportunities. Research suggests that suppliers and vendors are making purchasing decisions, employees are making decisions about where to work, and consumers are making decisions about what products to buy, based on the information provided about companies’ approaches to ESG.

A broad range of companies recognize the increased interest in sustainability and have already embedded relevant ESG considerations into their strategy, risk management, and governance, and many are already reporting on their ESG practices and progress. Many more are beginning this journey. As ESG investing becomes more mainstream, and stakeholders increasingly focus on ESG performance, more companies will benefit from demonstrating how they consider these issues.

The best practices below aim to help companies navigate the world of reporting and disclosure. They are not mandatory, nor intended to replace existing disclosure frameworks and standards. Rather, our aim is to facilitate companies moving forward on their ESG disclosure by:

  • Highlighting key elements of good quality reporting.
  • Drawing attention to useful resources, including those provided by the NYSE.

The target audience for these best practices include those individuals in reporting organizations who are responsible for ESG governance and oversight, strategy and risk management, reporting, and communications with various stakeholders (including the investment community).


Steps to getting started: An Overview

Just as financial reporting is not the end goal for the company, but a way of communicating the financial results of its various activities, sustainability reporting or ESG disclosure should be understood as a way of communicating how the company is managing ESG issues. The disclosure is an output and is aimed at meeting stakeholder demands for transparency and accountability. The process of reporting can also contribute to improving a company’s understanding of its own ESG risks and opportunities, creating a virtuous circle of improvement.

While these best practices are aimed primarily at the reporting/disclosure part of the ESG value chain, it touches upon other aspects that are relevant for high-quality reporting.

Identifying the right approach for your company

Identifying stakeholders and evaluating the state of engagement

Assessing materiality

Establishing governance

Integrating ESG into business strategy

Telling your story

Reporting frameworks and standards

ESG research and ratings


ESG reporting and disclosure is an opportunity for companies to tell their own ESG story. High-quality ESG reporting builds trust with shareholders and key stakeholders and demonstrates that a company understands how ESG issues affect its ability to create long-term value.

Reporting should be an output, not an end in itself. It should reflect what your company is doing to manage your ESG risks and opportunities.

ESG disclosure is most compelling when your company explains:

  • Why you have focused on the issues that you have (stakeholder engagement, materiality)
  • What your company is doing about those issues (strategy, measurement, targets)
  • What oversight your company has in place to make sure you stay on track (governance)

The best report is not the longest one but the one that demonstrates focus and understanding of the issues.


NYSE ESG Resource Center

Extensive online resources including access to experts and a disclosure guidance library.

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NYSE Board Advisory Council

Proactively addressing the critical need for inclusive leadership on boards by connecting diverse candidates with companies seeking new directors. Through a series of events and an online platform the Council introduces candidates to NYSE-listed companies seeking to expand diversity on corporate boards.

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ICE ESG Reference Data

Institutions and financial professionals around the world are increasingly factoring environmental, social and governance (ESG) risks and opportunities into their decision-making process.

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Managing Climate Risk

Corporates subject to carbon cap and trade programs and renewable fuel standards use our markets to meet obligations and manage their risk in the most cost-effective way. Market participants can deliver carbon allowances, carbon offsets and renewable energy certificates into a range of registries in Europe and North America.

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1 About the PRI, UN PRI

2 We say “claiming to” only because there is no agreed international definition of an ESG investment product. The GSIA defines sustainable investing as “an investment approach that considers environmental, social and governance (ESG) factors in portfolio selection and management”. However, it does not assess the “quality or depth” of the approach.

3 Global Sustainable Investment Review, Global Sustainable Investment Alliance, 2018:

4 Report on US Sustainable and Impact Investing Trends, US SIF Foundation, 2020

5 Responsible Investment Strategies, Eurosif; What is responsible investment?, UN PRI

6 Further evidence of ESG outperformance during Covid crisis, Corporate Adviser, 2020; Majority of ESG funds outperform wider market over 10 years, Financial Times, 2020, New Meta-Analysis from NYU Stern Center for Sustainable Business and Rockefeller Asset Management Finds ESG Drives Better Financial Performance, NYU Stern, 2021.

7 10 reasons to care about environmental, social and governance (ESG) investing, BofA Merrill Lynch, 2020

8 Government sets out world-leading new measures to protect rainforests, Department for Environment, Food and Rural Affairs, 2020

9 Deforestation leaves investors exposed, Aberdeen Standard Investments, 2019

10 GRI 101 Foundation 2016, GRI, 2016

11 Statement of common principles of materiality of the Corporate Reporting Dialogue, CRD, 2016

12 This second articulation of the materiality matrix aligns with the GRI definition according to GRI 101 Foundation 2016.

13 Materiality definition: the ultimate guide, Datamaran

14 Report of the Committee on the Financial Aspects of Corporate Governance, A. Cadbury, 1992