From Amazon to Walmart, companies across the globe are striving to implement ESG initiatives that can stand up to increased scrutiny. The energy industry, like all industries, is facing the possibility of new standards for carbon emission disclosures that will need to be disclosed to shareholders, stakeholders, and regulators. Simply put: today’s investors are relying on more robust and transparent ESG reporting procedures more than ever as they evaluate the investment potential of a particular business.
The U.S. Securities and Exchange Commission (SEC) recently announced that it is seeking comment on how to set climate change disclosures that provide consistent, comparable, and reliable information. If enacted, the new SEC proposal will compel energy companies to leverage new data, tools, technology, and skills to be transparent on how they disclose and report their ESG data and metrics.
However, collecting, measuring, and reporting on this non-financial data can be complex. ESG reporting has matured over a brief period, with data quality becoming a key focus, and new criteria data emerging. Current guidelines are being updated and converged constantly by standards-setting organizations such as Sustainability Accounting Standards Board (SASB), Task Force On Climate-Related Financial Disclosures (TCFD), and Global Reporting Initiative (GRI).
Reports have found that 91 percent of business leaders are facing significant challenges in making progress on sustainability and ESG initiatives, such as:
- Not knowing where to start
- Challenges in collecting data metrics
- Clear reporting guidelines
- Time spent on collecting and incorporating the data
So where should your company start? Relying on technology to strengthen analytics capabilities and the ability to accurately report on them with solid data is a great start for easing this complex process.
“ESG issues are evolving across multiple industry sectors and are a critical business imperative that requires a strategic, multi-stakeholder approach. The key is integrating ESG with business strategy for long-term financial and operational benefit,” says Josh Sherman, Partner, Opportune LLP.
Here are three technology-driven solutions that can help organizations improve the quality of their ESG reporting.
1) Energy Management Systems
Energy management systems (EMS) are automation systems that collect energy measurement data from the wellhead, pipeline, or other energy-producing asset and make it available to users through graphics, online monitoring tools, and energy quality analyzers, thus enabling the management of energy resources. Currently, ISO 50001, the global energy management standard, specifies requirements for companies to develop and implement a robust EMS, providing organizations with a framework that validates best practices relating to energy efficiency, use, and consumption.
2) ESG Data Monitoring Dashboards
ESG data monitoring dashboards are being used to rate the maturity of energy companies’ ESG management programs, flag companies that lack systematic programs to address ESG topics, and identify priority actions. Salesforce’s Net Zero Cloud is one example of an ESG data monitoring dashboard platform that energy companies have turned to for getting a 360-degree view of their ESG metrics in real time. Opportune is a proud Salesforce implementation partner.
3) Integrated ESG Analytic Platforms
AI-powered ESG data, analytics, and research platforms are gaining traction in the market as a way for companies to get new and timely insights as they integrate ESG as part of the investment management process and company decision-making.
Technology is only as effective as the purpose it fulfills. Therefore, organizations must spend time implementing modernized technology that meets their unique needs and establishes more robust internal management processes for effective ESG reporting procedures that build trust with their investors, shareholders, and regulatory bodies.