Is your company considering adopting ESG sustainability reporting, or has it already started, and the process appears pretty complex? Well, environmental, social and governance (ESG) reporting has become an important component for risk management, compliance and meeting stakeholders' expectations. As more companies join the ESG reporting fleet, concerns about greenwashing have emerged.
According to PricewaterhouseCoopers, greenwashing is emerging as a major challenge, threatening to roll back the value already achieved from ESG sustainability reporting. Schroders Institutional Investor study supported PricewaterhouseCoopers after establishing that 59% of investors have concerns about ESG reports because of greenwashing. The primary goal for ESG sustainability reporting is to win support from stakeholders and prevent your company from getting associated with unsustainable practices, but how do you go about it?
The answer to overcoming greenwashing is using ESG technology for your company. Keep reading to learn how ESG technology can be a game-changer in your business sustainability journey. We will also tell you why Diginex.com is the best tech center for apps to help you with energy, water use, raw materials, social, governance and emission reduction, among other reporting for your company.
What is the Process of ESG Sustainability Reporting?
Sustainability reporting is a conscious process of disclosure and communicating environmental, social, and governance (ESG) risks. This extends to your company’s goals for sustainability and how it is advancing towards them. While the main target of ESG reporting is the creation of a sustainability report for stakeholders, it extends way beyond that.
Sustainability creates a new way of doing things so that your company can become more efficient, a source of joy for staff and society, and profitable without damaging the environment. Through ESG sustainability reporting, the EU, stock and financial markets such as HKEX, the UN, customers, investors and other parties on the planet appear in agreement that we can overcome global challenges.
So, can ESG reporting work where other initiatives, such as the Kyoto Protocol, failed?
ESG reporting has a huge potential because more countries are appreciating the dangers threatening the planet. This is why you need to use the right ESG reporting framework, such as the Global Reporting Initiative (GRI) or the Task Force on Climate-related Financial Disclosures (TCFD), and make your report as accurate as possible. ESG technology also comes in handy in helping you stick to sustainability reporting principles and avoid greenwashing.
How Technology is Changing Sustainability Reporting
Here is a demonstration of how ESG technology can make sustainability reporting more effective.
- ESG Technology can Help to Improve Company’s Performance Visibility
When you appreciate the evolving investment climate, it becomes possible to set out more effective goals to enhance your company's performance on material topics. However, tracking this performance can be a major challenge because data is not readily available. Using ESG technology, your company is able to streamline the sustainability reporting process of data gathering and visualize it from a single platform.
By integrating advanced ESG sustainability reporting apps, it is easy to identify areas that are performing more effectively. Furthermore, you will be able to note the underperforming areas and initiate changes for improvements. For example, what changes should be adopted if you are missing the pre-set target of cutting down GHG emissions?
- Gathering Data from Various Streams is Straightforward
ESG sustainability reporting for companies is not accessible from a single point. Often, this data/ information is spread in different departments and geographical regions. For example, data on production efficiency, climate-related info like carbon emissions, new energy, staff training on green energy, campaigns on social justice, and waste minimization might fall in different departments. Trying to gather this information manually often results in key gaps, making the data suspect and the report may get labeled greenwashed.
ESG technology can come in handy in helping you to digitize the entire data gathering process and ensuring it can be traced back to the source. ESG technology becomes the pillar for enabling transparency of the data, making the report you ultimately produce more reliable. Advanced apps make it possible to automate the process and focus more on your company's risks and opportunities.
- Respond to Multiple ESG Reporting Frameworks
Because of the growing number of ESG frameworks, from SASB to CDP, amongst others, your company should go for agile mechanisms to increase the reporting methods. ESG technology can help your company use the same ESG data but apply it via multiple frameworks. Responding to different frameworks also implies that the company can easily track its performance, challenges, and areas that require improvements based on set standards.
No matter what angle your targeted stakeholders want to look at the organization, ESG technology can help you demonstrate your commitment to responsible operation.
So, it is time to get it right and race to the next level of success.
To comply with ESG standards and enjoy all the benefits that come with correct sustainability reporting, you have to embrace technology. The best ESG technology, such as sustainability reporting software, will simplify your work and eliminate the risk of the final report getting labeled greenwashed. Talk to our sustainability experts at Diginex.com to learn more about ESG technology application in your industry and get all the reporting-related services or insights.