By Abhay Krishna, Director of Value Management, Workiva
NORTHAMPTON, MA / ACCESSWIRE / October 24, 2022 / I recently heard someone say that companies that have not yet started creating environmental, social and governance (ESG) reports are data-rich but information-poor. So true.
These organizations have utility bills, data on workforce demographics, learning metrics, customer privacy and data security policies, human rights commitments, supplier diversity sources and statistics, and countless other sources flying around. their data ecosystem but lack ESG insights or reporting.
So why is it so hard to turn data into informative insights?
Some organizations do not know what to report, how to collect the data and how to report it effectively. Others simply don’t have enough resources to get the job done. Still others don’t trust the data to reveal anything out there.
Whether the constraint is knowledge, resources or confidence, technology can help close the gap between data and information. Here are five reasons why companies are taking advantage of technology as they embark on their ESG journeys.
How ESG reporting technology helps
1. Simplify the way you set your ESG strategy
At the beginning of an organization’s ESG journey, the typical question is what should I focus on and report on? Defining an ESG strategy typically involves performing a materiality assessment, researching the ESG performance of partners, reviewing ESG frameworks and standards, and using them as a basis to determine what to focus on and how to disclose related ESG performance.
Done manually, this can be a daunting exercise, switching between different reporting standard setters’ websites, extracting their requirements into spreadsheets, emailing questionnaires to stakeholders and consolidating their responses.
How Workiva helps: Developed by Workiva ESG pathwhich provides a solid foundation to help you fine-tune your ESG strategy with our built-in materiality assessment, framework research tool and industry-focused ESG topic finder.
2. Create scalable, efficient and controllable processes from the ground up
Once the strategy is set, defining the ESG reporting process requires understanding how to collect data effectively and report it in a highly controlled, auditable way. This means no copying and pasting, availability of supporting documentation and audit evidence upon request, and matching data and narrative. Getting these processes right can be tricky, especially when they don’t exist.
How Workiva helps: Workiva has built pre-configured data collection templates, workflows and related reporting templates into ESG Path from our experience transforming reporting for hundreds of companies to help you establish a highly controlled, efficient process from the ground up. You can build a solid foundation for audit-ready ESG reporting with a platform that scales with you as your ESG program matures by Exxaro found when building its technology-enabled ESG reporting process with Workiva.
3. Gain efficiency to free up time for more strategic work
ESG reporting can be a highly manual, tedious job that requires collecting data, summarizing it in a master file, and copying and pasting it into reports and presentations, while reviewing supporting documentation that may exist elsewhere. Or it can be highly strategic work engaging stakeholders, benchmarking peers, tracking commitments vs. actuals and transforming the business. Your choice, but it becomes either/or when late nights and weekends are at stake.
How Workiva helps: Workiva’s ESG Path can help you take care of mundane, repetitive, low-value tasks and free up your time to do what matters most, both in the early days and in the longer term. Automate data collection and create time for more strategic planning and alignment. It will pay off.
4. Establish confidence in your data when internal control is at its peak
Revealing something publicly for the first time causes a lot of introspection. The legal department has questions about the risks and cost-benefit analysis of disclosing more. Investor relations has questions about the overall narrative. All stakeholders need to know that there is sufficient evidence to support the ESG story you have been busy creating. Do you want to download this evidence one by one in fragmented spreadsheets sitting in your inbox, or do you want to display this evidence effortlessly in context embedded as you review reports with your ESG steering committee?
How Workiva helps: ESG Path lets you connect data points, attach documentation, and automatically capture an audit trail. This helps you lay the foundation for strong data governance and establish trust with stakeholders in your disclosures.
5. Be future proof
ESG reporting involves a dynamic ecosystem where stakeholder needs evolve every day. Customers want more data from their suppliers, investors need more data from their portfolio companies, employees need more data from their employers, and regulators are pushing for additional ESG disclosure. New frameworks, estimators and classifiers are emerging. Foreign, state and local governments make rules. There is talk of harmonization and convergence of reporting rules, XBRL® data tagging and electronic archiving. How will you cope with all this change?
How Workiva helps: Workiva’s ESG Path can help you create the foundation for aggregating all your data and creating consistent reports and presentations to meet evolving stakeholder needs. Whether you want to start incorporating ESG data into financial reports, file ESG data electronically with the Securities and Exchange Commission (SEC), prepare for external data validation, or add XBRL tags to data, Workiva can help you
Request a demo to see how you can use ESG Path to lay the foundation for strong reporting.
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