The Importance of Reliable Sustainability Information
Don’t be mistaken, whether corporate sustainability reporting is mandatory now or later (some of the CSRD requirements may be postponed by the recent European Commission’s Omnibus package proposal), strategic sustainability areas constitute priorities.
For the ones of you fluent in CSRDish, the Esperanto of the sustainability professionals community, we are talking about the “metrics related to material sustainability matters”.
There is an indisputable need for reliable information on the sustainability performance, regardless of the level of integration of sustainability in companies and the reporting requirements in force. Responsible data-driven decision-makers demand information they can trust.
Challenges in Sustainability Reporting
As a sustainability dinosaur and an ex-PwC Sustainability Reporting Assurance manager I happen to have a few hints on what it takes to build trust in sustainability information, here are some!
Let’s play a little game together, shall we? Go through the few situations below where people are using information on a company’s sustainability performance and ask yourself whether it matters that the information is accurate. Keep count.
- You are looking at the energy intensity performance of the past year on your company’s intranet’s report to determine whether all employees will receive a bonus as planned by the incentive programme of your company
- A potential client visits your factory and asks you about the number of days with zero work accidents presented on the shop floor’s dashboard
- You were asked by the top management to propose ambitious but realistic short-term GHG emissions scope 3 reduction targets, you look at the past 5 years performance published in the company’s voluntary sustainability report
- A retailer, who is a strategic client to your company has set new procurement requirements and you have just a few weeks to provide evidence that the materials used in the packaging of your products are sustainably sourced.
How many did you get? And most important, did you know whom to turn to find out? Did you have any doubts about the calculation methods, the data quality or the results altogether? How would you make sure the data is up to date?
Behind all the situations above, there is a reporting process be it explicit or not. Therefore, solutions look pretty much the same for sustainability reporting than for others and assurance procedures follow the same standards too. But there is just this little twist more, that makes it so much more fun to play around with: a multitude of calculation methods, sources of raw data, the use of estimates and the fact that there is a relatively short history of mandatory assurance.
Ensuring Data Quality and Streamlining the Reporting Process
Here are some tips to get your pulse down and a confident smile back on your face:
- Data quality: establish procedures to ensure robust data is used.
- Remember the S*-in-S*-out principle? Find out what your KPIs are built upon, where the raw data are originating from and whether you can tell for any given KPI, what set of data was used.
- Draw the flow of information, this will probably look like a very large family-tree if you are dealing with GHG emissions scope 3 data!
- Manual manipulation is sadly still common practice (someone looks up the value from a screen, writes it on a piece of paper and types the figure into a worksheet’s cell or a second person types values into the body of an e-mail that is sent to a person who also uses manual input methods), things can go wrong at each and every turn and if you repeat this over a few thousands of figures…
- Seriously consider automating your reporting process. To find out more, reach out to professionals with proven-track records of ESG automation such as Etlia
- Find out what assumptions are made, are the figures based on estimates, are they based on measured or calculated information, what calculation methods are used. Was it hard to check this bit?
- Implement a well-documented, well-maintained and user-friendly reporting process
- Remember the S*-in-S*-out principle? Find out what your KPIs are built upon, where the raw data are originating from and whether you can tell for any given KPI, what set of data was used.
- Shake your reporting process’s tree (I know I keep talking about trees, bear with me…) and find out how robust it is:
- double-check, re-calculate
- walk-through the process, try and follow the trail all the way up to the raw data
- use sensitive analysis tools,
- meet the people involved in reporting, are they aware of the role they play? do they know what the information they process is used for and by whom?
- Motivate your reporting team:
- engage people affecting the quality of your information, explain how valuable their contribution is and listen to what they can teach you on reporting, they know their stuff!
- clean it up: make sure sources of errors are addressed and no one is blamed for them, it is a collaborative effort
- celebrate, there is no such thing as a small victory! Make improvements every time they count. Don’t wait for the big solution to solve all your problems. Tools do not create a reporting process, they only facilitate it.
- sometimes it can be hard to give up on old ways of doing things, ask your quality colleagues or your change management gurus for tips
- lean your reporting process: aim at a smooth, tidy, efficient and quality data producing process!
Etlia and Luotsi Yritysvastuupalvelut
Combining the expertise of the Etlia data engineer expertise and Luotsi’s deep understanding in sustainability reporting requirements and processes these companies provide together a robust framework and solution for organizations to navigate the complexities of sustainability reporting and make informed, data-driven decisions.
If you need more information, please contact adeline@yritysvastuupalvelut.fi or fill the contact form on our website.
– Adeline Maijala, CEO, Luotsi Yritysvastuupalvelut Oy – Etlia’s Co-Champion