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Companies need to leverage data and technology better to augment sustainability reporting and meet consumer and investor needs.
In brief
- Consumers and investors are increasingly demanding transparent and data-backed sustainability reporting from businesses.
- To have a truly data-driven approach to sustainability reporting, companies need to invest more in building their data sourcing and analytics capabilities.
For decades, forestry companies have been under increasing pressure to demonstrate their commitment to sustainability and environmental responsibility. Many have made great strides in reducing their impact on the environment and reporting on their sustainability initiatives and ambitions. And now, technology has begun augmenting sustainability strategies — with a majority already turning to digital enablers, such as 5G and the internet of things (IoT), to fast-track their sustainability goals.
With ESG likely to become a key consideration for companies when it comes to technology investment, it is more important than ever to understand and leverage the power of data and technology for sustainability reporting.
EY Reimagining Survey Futures Study 2023
say ESG considerations are a leading or important consideration informing their emerging technology investment plans or decisions.
With the rise of advanced data analytics and technology, it is now possible to go beyond basic sustainability reporting and use data-driven insights to drive better decision-making and promote real, lasting change.
In this article, we will explore:
- Four benefits of augmenting your sustainability reporting with technology and data
- Key drivers increasing the need for data and tech in sustainability reporting
- How EY teams can help
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:
- 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.
- 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.
- 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.
- 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.
With increasing investor focus on the ESG performance of an organization, access to quality data and analysis of ESG initiatives is becoming a competitive advantage.
Summary
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