Since 1992 when the UN held the first-ever meeting on environment and development, the concept of sustainability has evolved and is now the quintessence of addressing the global ills. After several failed attempts to address global challenges, mainly from lack of goodwill or misunderstanding of the interconnectedness of nature, things are now different, and all stakeholders are demanding sustainable business operations.
Actually, it started with customers and investors, and now, governments and different authorities at the global and local levels are making it mandatory.
At the investment level, stock exchanges like Hong Kong Stock Exchange (HKEX) and London Stock Exchange (LSE) are only allowing the listing of companies that release regular ESG reports. Regulatory authorities have also joined the ship, with the EU leading the way with the Taxonomy legislation that is expected to overhaul current laws to put more emphasis on sustainability for every company or investing firm. Notably, ESG reporting is not simply about creating reports for presentation, but helping companies direct their focuses towards sustainability, which is not easy.
If a report is produced hastily, maybe days to the deadline, just for the sake of it, the ESG sustainability team of experts will easily flag it down. Most stakeholders will also not be able to use it to make decisions about your firm. Instead of trying to create reports using incorrect data that will not help your firm, it might be a good idea to work with ESG analysts. In this post, we will demonstrate when you should consider going for an ESG analyst.
Looking at the entire ESG reporting process, it is easy to think it is all about the final sustainability report, but that is wrong. Rather, ESG sustainability reporting is an ongoing job that primarily focuses on the process while the reports only view the activities involved and achieved results. Well, comprehending this ideology is never easy for many people or company operating teams. Here are the three key things make the process complicated:
● The esg reporting framework: For you to undertake ESG sustainability reporting correctly, it is important to have an appropriate sustainability framework. Well, from selecting the right framework to its application, most people find that complex enough. For example, do you select Global Reporting Initiative (GRI) or Task Force on Climate-related Financial Disclosures (TCFD)? The only way to be sure of selecting the right framework is to work with an ESG analyst. The professional comes with a lot of experience and you can count on him/her to work on the right management structure for ESG reporting.
● Materiality Assessment: During the ESG reporting process (and CSR reporting), the first step, preferably the initial days of process management, is a comprehensive analysis of key opportunities and risks of the company, followed by a materiality assessment. The idea of materiality involves narrowing down to the reporting topics that your company should focus on, and it is never easy.
An ESG analyst will come in handy to help you understand materiality and narrow it down to the best areas of focus.
● Data gathering and reporting: Another attribute that makes ESG sustainability reporting challenging is data gathering. The ESG reports you prepare are expected to be accurate, verifiable, and easy to read. Well, achieving these targets is also tough for managers, prompting them to seek the help of ESG analysts.
As an entrepreneur or manager of a company, you should not let anything come between your firm and creating top-quality reports. Apart from the complexity, you should go for an ESG analyst if you notice any of the situations below:
● When You Target to Scale Your Company to the Next Level
If you had already started ESG sustainability reporting, the associated benefits might have started trickling down to your firm. However, reporting might be challenging when the project or business is rapidly scaling up. This is because the parameters and parties that you need to deal with are more. For example, investing people, team of managers, and regulatory authorities, are more. However, an ESG analyst with experience will help you to review different options and seamlessly transition to the next level.
● After the Introduction of New Policies or Legislations
Change in a company, whether initiated from within or outside, can be pretty challenging to implement. If you run a company and new laws on ESG are introduced, implementing them is likely to be an uphill task. A good example is when Hong Kong introduced the new ESG reporting standards for listed companies. How to work on the new laws and the job to allocate every party in the management can be challenging.
Under the new rules, the companies’ boards of directors are tasked with the duty of foreseeing the ESG reporting process. However, it is the requirement that the ESG report must anticipate future risks and opportunities that have become extremely challenging. If you have a company in Hong Kong, it will be an excellent idea to work with ESG analysts to help with compliance with new laws.
● When Planning for New Strategies
As we have highlighted already, ESG reporting is a process that impacts all the areas of company operations. Therefore, the process of planning new strategies would benefit a lot from ESG sustainability reporting. If you need to install new machinery, the ESG materiality assessment can come in handy in determining what model to use and when to install it.
For example, although expensive, a more advanced machine might be recommended by an ESG analyst because it will help enhance efficiency, cut down emissions, and pull down costs of operations.
Making such a decision with the help of an analyst means that you are able to work with long-term projections for better results.
Now that you have noted the key signals that show you need to work with an ESG analyst, how do you select the best for your company? The most important attribute for the ESG analyst is enthusiasm for the job.
Remember that ESG reporting is highly versatile, implying that you have a lot of room to decide on what to prioritize. Therefore, the expert should help you pick the activities for maximum ESG sustainability impacts, just like AGO. Here are other attributes to look for when identifying an expert:
When it comes to sustainability reporting and taking advantage of all the ESG-associated benefits, having an expert in your corner is the way to go. A professional ESG analyst can help you understand the process of ESG reporting more effectively and adhere to all the underlying principles. Call Diginex for the best ESG analyst and sustainability reporting software.
Every day, thousands of acres of forest land are being cleared off trees that took hundreds of years or more to grow.
Today, most governments, individual departments, and certification organizations demand that companies operate sustainably.