We are experiencing a crucial convergence between ESG and digital transformation innovations. Researchers report that when organizations adopt and correctly report their efforts on ESG, stakeholders want to stick around, associate with, and become part of them. Therefore, you must be upfront and transparent on both the short-term and long-term ESG value and manage the ensuing risks. The answer to achieving this is using the right impact reporting software.
If you are new to ESG sustainability reporting, it might sound a bit complex, but we must say that this is like a train that has set off with no reverse option. Governments, local authorities, stock markets, central banks, and quality assurance entities are installing laws and adopting policies for ESG reporting. With the global challenges, especially global warming and climate change, threatening the entire planet, we cannot rest and businesses have a bigger role to play.
Keep reading to learn more about ESG sustainability and why having the right impact reporting software can be your stepping stone to success.
A Brief about Sustainability Reporting
Why Sustainability reporting? Why now? ESG sustainability reporting is the disclosure and communication of a company’s focus on protecting the planet and people. The report captures the company’s objectives on sustainability in three key areas, environmental, social, and governance, and strategies implemented to achieve them.
Although the idea can be traced back to about 30 years in 1992 during the UN Conference on Environment and Sustainability (UNCED) in Rio, it is only recently that more countries have given it focus.
The EU has taken the lead in its call for sustainability with progressive laws, such as Taxonomy legislation and its policy on reducing greenhouse gasses (EGH) by 53% by 2030. By 2050, the EU targets to be carbon neutral. Other states and stock markets are following in the EU's footsteps.
- The UK has indicated that all companies in the country will be required to prepare annual ESG sustainability reports in line with the TCFD framework by 2025.
- In 2021, Hong Kong Stock Exchange (HKEX) published new requirements for all listed companies to release comprehensive ESG reports every year.
- By 2020, one in every five small and medium-sized companies was using globally accredited standards for ESG, such as SASB, UN SDG, TCFD and GRI.
- Business and Sustainable Development Commission indicates that giving more focus to the UN Sustainable Development Goals (SDGs) can unlock approximately US 12 trillion per year and create close to 400 million jobs.
- In the United States, 53% of the revenues generated by the leading 500 companies and 49% of the largest 1,200 firms globally are from activities supporting SDGs.
5 Things You Must Think about when Starting ESG Sustainability Reporting
The numbers we have highlighted above demonstrate that for your company to rise and stand out from the pack, ESG sustainability reporting should be part of the core of operations. This means that sustainability impact reporting does not end with creating a report for stakeholders. Rather, it becomes an important agenda in crucial board meetings, strategic management plans formulation, and reporting.
To capture this action, you need the right impact reporting software to help the involved team in the company’s project.
Here are the five most important things that you need when starting the ESG sustainability reporting journey:
- Clear understanding of the ESG sustainability reporting process. Do you have the right metrics? How do you create or identify the right reporting topics?
- Appreciating the importance of engaging stakeholders at the start of the reporting process, especially in drawing the material topics. Even at the early stage of the process, make sure to appreciate how the topics will impact the final ESG report.
- Correct application of ESG sustainability principles, from accuracy and verifiability.
- The importance of correct data handling and analysis. This is where impact reporting software comes into play.
- The application of the right ESG reporting frameworks. Do you want to follow TCFD or GRI, among other frameworks? Remember that with the right impact reporting software, you might be able to work with several frameworks using the same data.
Impact Reporting Software Redefining Sustainability and Customer Success
In addition to these five things, we always encourage companies to consider bringing a professional on board. An expert can help to give your ESG reporting more focus so that it does not get labeled greenwashed at the end of the ESG reporting process. If you combine ESG sustainability impact reporting software with expert input, you are assured of high-quality results. So, how do you select the right app in a market flooded with multiple options?
We must say that not all apps or programs on the market are made the same. So, the aim is to narrow down to the ESG sustainability impact software that will deliver the results or impact you want by the close of the reporting time / phase. Here are some useful points to consider:
- The software should be easy to use for your team.
- Capable of helping you gather data from all the streams of interest.
- Developed by top brands on the market.
- The app should have regular updates for better performance and enhanced security.
- Comes with restricted logins so that only those with access rights can add or modify data.
- Were the previous users happy with the program last time they used it? If they were, you can also anticipate to get equally positive reporting experience.
- Integrated analytics for measurement of selected topics and easy generation of accurate reports in line with selected environmental, social and governance (ESG) framework.
- East integration with your management system.
The biggest mistake that you can make when starting the ESG reporting journey is trying to work on it manually. It results in a major challenge to prove to investors, community and other stakeholders about the commitment of the company to sustainability. The good thing is that ESG sustainability impact software from Diginex.com is only a click away. Talk to us, and our experts will help you to learn and get everything about ESG reporting and apps right.