Our partner and co-founder Patrick Elie was recently invited to lead a workshop on Metrio and how it addresses the latest trends in extra-financial reporting for Masterclassing. Here are the key learning points!
Companies must adapt to mounting pressure from consumers, investors and other stakeholders by incorporating sustainability into their decisions and operations, resulting in a growing number of ESG issues for companies to monitor and data for corporate social responsibility and sustainability teams to manage. One such emerging issue is how the value and supply chain affects a company’s social and environmental impact.
For companies, integrating sustainability issues across the value chain can be challenging. First, determining the impact from each activity in the value chain can be difficult. The more fragmented the value chain, the more complex impact measurement becomes due to potential difficulties in gathering environmental and social data. Second, the data and information is mostly gathered by third-party partners and providers, making it difficult for companies to verify its reliability.
This is achievable by taking a decentralized approach to managing ESG performance (for example via our sustainability reporting software), which provides quick and comprehensive collection of sustainability data shared by value chain actors.
Many companies understand that there is a proven link between extra-financial and financial performance where opportunity and risk are concerned; the mounting pressure from investors for report auditing was therefore to be expected. We observed a logical trend in tools being implemented that systematically and rigorously ensure reported performance is reliable, a trend that has rapidly become widespread as more companies adopted integrated reporting every year. At Metrio, we currently help our clients implement report auditing, as we expect the trend to become quickly a norm, through a smoother data validation and auditing management workflow,
Along with this need for trust and transparency with regards to sustainability reporting, investors typically request more frequent updates on
ESG performance. In view of integrating financial and ESG data, companies’ finance and strategy departments will also use sustainability data to provide the company with daily guidance. This trend has positioned sustainability as a full-fledged strategic department that ensures organizational viability and not simply as a program to enhance a company’s image. In practice, this results in a shorter reporting cycle (even in real time) and sustainability teams are expected to produce public reports twice a year or even on a semi-annual or quarterly basis. For our part, we took the lead by supporting our clients in adopting this emerging best practice. In fact, we
provide automated data collection and management tools that enable sustainability teams to align their reporting cycles with their company’s reality.
Decentralized data collection, systematic auditing, real-time reporting and converging frameworks: some of the trends to closely follow that will deeply impact reporting practices and norms!
International organizations ,such as SASB and GRI and various European governments, have been seeking to align their frameworks to increase their added value for investors. For example, the European Union has recently discussed creating a common framework. For sustainability teams, this will relieve them of that infamous reporting fatigue but will force them to overhaul their reporting practices and methodologies under a single framework. In the Metrio community, we adopted the data lake approach to prepare our clients. This approach provides a flexible and efficient means to capture and manage all kinds of data so they can pivot to new reporting practices whenever necessary.
Many companies use Excel and PDF spreadsheets to consolidate, analyze and communicate their sustainability performance. Evidently, these practices are inefficient since considerable time and resources are wasted collecting, verifying and calculating related KPIs. They are also somewhat limited since they cannot support emerging approaches in reporting. Only industry-specific digital platforms allow companies to stay on top of changing expectations in extra-financial accountability, such as decentralized data collection, systematic auditing, real-time reporting and more frequently updated frameworks and methodologies.
Find out how Metrio works and how it can simplify your company’s ESG reporting.