How can technology fast-track your journey to robust ESG reporting?

Four key benefits of augmenting your sustainability reporting with technology and data

Traditional sustainability reporting typically involves collection and analysis of ESG-related data using spreadsheets or other tools, in a document or report format. This process is time-consuming and resource-intensive, and there is a risk of errors or inconsistencies in the data reported.

Data and tech-driven sustainability reporting leverages technology and data analytics to automate and streamline the sustainability reporting process, improving accuracy and reducing the time and effort required. This approach can enable companies to gather more granular data, helping them better understand and portray their performance and identify areas for improvement.

Let’s deep-dive into four key benefits that technology can unlock for sustainability reporting:

1. Improved data collection and monitoring: With reporting requirements constantly increasing, a huge volume of data needs to be collected — from a range of sources, including company records, surveys and third-party data sources — and reported across an organization. With tech-driven sustainability reporting, data can be collected using tools such as sensors, IoT devices and software. Cloud-based technology solutions enable organizations to both monitor and collate ESG data from multiple sources in a timely manner.
2. Improved sustainability analysis: Traditional sustainability reporting typically involves basic analysis of the data collected, often in the form of charts or graphs. In data and tech-driven sustainability reporting, data is analyzed using advanced data analytics tools to identify trends, patterns and correlations in the data. Beyond ESG data collection and review using dashboards, there are now analytics platforms that companies can use for better planning and optimizing resources. These platforms use various metrics to calculate impacts, create reports, unlock data for analysis and provide actionable insights for companies to act on.
3. Interactive reporting: Traditional sustainability reporting usually involves producing a static report that is published annually. In data and tech-driven sustainability reporting, data is often made available in real time through dashboards and other interactive tools, enabling stakeholders to access and analyze the data as needed. Communicating sustainability initiatives and metrics with various stakeholders, from investors and customers to employees and suppliers, can be improved with interactive reporting technologies that make ESG data accessible and relevant to each group.
4. Verification: Data and tech-driven sustainability reporting can provide greater transparency and accuracy. For example, technology can enable a more thorough verification of data to ensure a secure and transparent record of data and transactions. This plays a vital role in ensuring accountability and credibility for the organization and its sustainability actions — before stakeholders and consumers.

Key drivers behind the use of data and tech in sustainability reporting

The use of technology in sustainability planning and reporting might still be in its nascent stage, but the growing conversations around this subject and interest from stakeholders — from policymakers and investors to consumers demanding transparency — is accelerating this trend.

Technologies such as AI, 5G and IoT are finding their applications in sustainability — such as in enabling auditable supply chains, tracing payment flows and measuring Scope 3 emissions. Below are four key drivers behind the need to leverage data and technology in sustainability reporting:

• Evolving standards and regulations: Governments and regulators are introducing regulations and standards to promote sustainable practices. Evolving standards and norms are putting pressure on companies to continually update their approach to sustainability analysis and ensure more transparency. Few companies get their sustainability reporting audited externally now — but this could be the norm soon.
• Need for open and transparent data: Consensus from stakeholders and consumers show that they are interested in getting more honest, data-backed information from companies on what they are doing for sustainability. This interest in sustainability is only going to increase the need for more granular and transparent data in sustainability reporting.
• Investor demands: Investors are growing more interested in companies' sustainability practices and are looking for reliable and transparent data to inform their investment decisions. They appreciate transparent data on the supply chains and efforts toward a more sustainable path. To meet this demand, companies need to provide accurate and comprehensive sustainability data that is easily accessible and understandable.
• Operational efficiency: Sustainability data can be complex and time-consuming to collect and analyze. By leveraging technology, companies can automate data collection and analysis, freeing up resources and allowing for more efficient and accurate reporting.