ESG reporting refers to disclosure of information on organisation’s environmental stewardship, social responsibility, and corporate governance.
In the EU and UK, ESG reporting is mandatory for large listed companies. From 2024 (covering FY 2023), considerably more EU-based organisations will be required to publish ESG reports as a consequence of the Corporate Sustainability Reporting Directive (CSRD).
What is CSRD?
CSRD sets out Environmental, Social and Governance (ESG) reporting requirements for companies. Its aim is to significantly expand the scope of the NFRD (in place since 2018), both in terms of who needs to report and what needs to be reported.
Why is it needed?
Investors and consumers are entitled to understand the ESG impact of businesses in a clear, easily comparable manner. Investors found that many current ESG reports omitted important or useful information, used differing metrics, and had different areas of focus, making it difficult to trust the data or benchmark companies against one another.
The CSRD aims to establish a shared framework for disclosing non-financial data that would enable thorough, robust, and standardised reporting. CSRD will enhance the current ESG practices but will also require more supporting evidence and data that will be subject to external audits. There are four areas of focus:
- Disclose indirect CO2 emissions produced by all other companies doing business with the organisation throughout the entire supply chain (data from suppliers).
- Organisations must disclose the company’s impact on social and environmental issues, and how these issues are likely to affect the business going forward.
- Companies must produce retrospective and forward-looking analysis. This will mean sharing quantitative information (measured impact to date) and qualitative information (strategy, targets) and reconcile (justify) the differences in subsequent years.
- All sustainability information must pass an external audit process before publication (similar to the EU ETS).
The current ESG preparation and reporting already takes companies three to six months to pull together. CSRD compliance is more rigorous, require more and wider ranging datasets with the full lineage and an audit trail. Each company will be disclosing different parameters depending on their business model and activities. But all will have to provide quality data as evidence.
How we can help?
This is where IOblend significantly cuts your data manipulation, management and preparation time by making the process robust, repeatable and automated. We can setup your ESG data collection and validation processes faster and more cost effectively than if you did it yourselves. We will connect to any of the data sources where ESG information resides. You will have a full data catalogue to help you discover relevant data. Your business logic will be seamlessly incorporated in the data pipelines. Your data will have record-level lineage and audit track throughout the journey of your data to satisfy any compliance requirements. And you can rest assured that you will remain in full control of all your data all the time.
Get in touch today and let’s discuss your ESG needs.