There are many aspects to Environmental, Social, and Governance (ESG) factors. Currently ESG disclosure and reporting are getting plenty of attention.
On February 23, we hosted a webinar with CDP and EY on leading practices for ESG disclosure where we highlighted the need for a robust ESG data management strategy. A recording of the webinar is now available. Here are three takeaways to give you a glimpse of what to expect.
The devil is in the details. With regards to carbon emissions, granular data is important. Tracking emissions data at the asset level provides two benefits.
First, it ensures data accuracy and credibility. By rolling up emissions data from assets, you get more precise Scope 1 emissions data for each plant or factory.
Second, granular data provides more opportunities to take concrete actions towards reducing emissions, and thus improve ESG performance.
Let’s suppose you have four emergency generators, and you know that they emitted 10,000 tons of carbon dioxide last year. What if you needed to reduce those emissions by 20%? Where would you start?
If you knew that the first three generators emitted 500 tons each, and the fourth emitted 8,500 tons, does that give you a better idea of where to focus your emission reduction efforts?
There are many other examples where tracking asset-level emissions data can help you identify opportunities to cut GHG emissions.
Establish trust in the data
During the webinar, Kate Even from EY spoke about Avery Dennison, a Fortune 500 firm, and how the company manages disclosures to CDP with Enablon. Kate emphasized that organizations must establish trust in the data.
This is achieved by having a single, consolidated solution that acts as one source of truth, and where data has gone through the proper reviews through data approval workflows. This is better than relying on spreadsheets with notes and comments, or having many different systems. Data consistency checks that inform users or prevent incorrect data entry or data discrepancies also help to build trust in the data.
In addition, a solution like Enablon provides data auditability (audit trails) and clear traceability of calculations and underlying emission factors, which helps to comply with requirements from the EU’s Corporate Sustainability Reporting Directive (CSRD) and the U.S. SEC’s potential rule on climate-related disclosures.
Having all ESG data in a structured system makes you and your stakeholders trust the data even more. As Kate mentioned during the webinar, you don’t have to ask questions such as “Are these the latest figures”, or “Has anyone reviewed these?”
Use the same data in multiple contexts
The multitude of ESG and climate-related reporting standards, frameworks, and regulations can create confusion and impact your ESG data management strategy.
But ESG software systems like Enablon can help. During the webinar, Océane Rabillon, Lead Product Manager at Wolters Kluwer Enablon, explained the ‘collect once, report multiple times’ approach, which consists of contextualizing the data. It works like this:
- Data is collected. A consolidated ESG data repository is established and acts as the single source of truth.
- Data points are mapped to the different standards, frameworks, and regulations. This is available out-of-the-box in Enablon.
- As part of the mapping, data is adapted to fit with each standard, framework, or regulation.
When a standard is updated, the mapping between the data and the standard is also updated, while the source ESG data remains unaffected. This helps to avoid inaccuracies and inconsistencies between different disclosures, and it saves you valuable time.
It also allows you to view data in different contexts. You can see the source data and how it appears when mapped to CDP, GRI, SASB, or any other view, in a user-friendly way.
Finally, Rosie Rust from CDP made an excellent point during the webinar: limited disclosure is always better than no disclosure at all. It’s all about taking the first steps on the disclosure journey.
Also, look at the big picture. Leverage ESG data for more than ESG disclosure. Identify opportunities to further improve ESG performance. Go beyond reporting.
Watch the recording of the webinar to learn more.