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The Challenges of Manual ESG Reporting

Whether you’re just getting started with ESG Reporting or have been manually creating your own reports, you are probably quickly becoming aware of the challenges that come with finding, sorting, and preparing the relevant data that you need.

Does this sound like you? Continue reading below to find out how Verdafero InSights can help simplify the task of ESG Reporting for you.

What is an ESG report?

An ESG report is a collection of data points that show a company’s Environmental, Social, and Governance performance over a certain amount of time. The information collected is presented in a way that shows a company’s improvements or shortcomings compared to the goals they have established for themselves or set for them through a governing body.

A basic ESG Report should include the relevant metrics that you’re reporting against, the operational data from your company, and your proximity to reaching the ESG goals you’ve established. All of this needs to be organized into a framework that makes it useful for anyone interested in scrutinizing or using the data.

71% of CEOs believe it is their personal responsibility to ensure that the organization’s ESG policies reflect the values of their customers [KPMG]

What makes ESG Reporting so challenging?

Accounting for all emissions streams

When it comes to reporting their carbon footprint, one significant obstacle that businesses must overcome is ensuring that each and every one of their emissions—including those generated by their operations, supply chain, and product consumption—are considered. However, doing so requires a significant amount of additional research that some businesses do not have the resources or the capacity to do.

Furthermore, there is no “one size fits all” solution. Instead, it is up to each company to figure out which aspects of its business are most relevant to the many stakeholders it has in this area, and then choose the method that will be most effective in communicating them.

Possibility of human errors

In reporting ESG data, companies need statement accuracy that can be measured and independently verified. If these are lacking, the accuracy of the reporting may be called into question. Human error is another risk while entering ESG data, particularly when inputs are submitted manually.

Processing times are lengthened, and additional inefficiencies are introduced as a direct result of errors that occur during manual data input or rekeying. Inaccurate data collection results in extra difficulties and inefficiencies farther down the line.

Inefficiency of spreadsheets

According to research released by Ernst & Young, most public firms (55%) still save their ESG data in spreadsheets created in Excel. The same survey also indicated that larger firms that collect data from various sources concur that using spreadsheets in the modern business environment is impractical. Spreadsheets have several limitations, including the inability to communicate effectively, manual data input mistakes, broken linkages across workbooks, and a lack of data security.

Furthermore, the spreadsheets used in the management of ESG data are often generated by a single individual, and they include formulae and functions others may not understand. Consequently, it is difficult to present a comprehensive and integrated picture of ESG benefits and effects since the data relating to these topics is often stored in spreadsheets or manually entered into silos dispersed across the company.

Spreadsheets may foster a sense of familiarity, but their use is likely to result in poor data administration. When using multi-tier mapping, it’s likely companies will need more human resources and work hours to produce them. In addition, maintaining data transparency becomes a laborious and unmanageable task.

Uncertainty around frameworks

Another problem for businesses is that they are unsure which indicators to employ. Metrics are always subject to change, since they are continually gathering new information on environmental effects. Because reporting standards are constantly evolving as well, it may be challenging for businesses to maintain relevant data management and reporting at the same time.

Moreover, numerous businesses still struggle to collect and organize vast amounts of high-quality quantitative and qualitative data. This data is often decentralized, multidimensional, and extensive. It originates from several departments and sources, in multiple forms, and often comes in at different times.

To successfully conduct any sustainability effort, it’s essential to have consistent processing and administration of the appropriate data. In today’s business world, the absence of standardized procedures for handling information of this kind is one of the most important and pressing hurdles. For example, it there are not enough mechanisms for collection, verification, and presentation; it may be difficult for stakeholders and prospective investors to compare ESG funds and evaluate how well they perform in terms of sustainability.

Engaging frontline personnel in data gathering

How to engage frontline staff in data collection is likely to be another obstacle. Effective ESG reporting requires more than a top-down approach. It is essential to include all workers at all organizational levels daily.

However, many firms struggle to engage frontline employees in data collecting. Most of the time, there are questions about what sorts of information to gather from frontline employees and concerns about how well they collect the data and provide it to managers.

How can you implement an easy-to-use ESG Reporting system?

Look no further than Verdafero InSights™ ! A patented cloud-based platform designed to securely monitor, analyze and report across utilities for any size property portfolio.

Verdafero InSights™ can be used to detect utility leaks, theft, and efficiencies, as well as forecast trends. InSights can also identify upgrade projects, head off future issues, save money, and increase operating profits. We automatically calculate GHG emissions for ESG and sustainability reporting.

The Challenges of Manual ESG Reporting

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