ESG Data Management Solutions
Selecting the Right ESG Platform for your Organisation
Insights
Why ESG data matters
With the surge in both the complexity and importance of environmental, social, and governance (ESG) reporting requirements, robust ESG data management has become crucial for businesses striving to meet regulatory compliance obligations in sustainability reporting, align with stakeholder expectations, and drive sustainable growth.
In 2024, we saw another significant period of change for ESG mandatory reporting. Since January, we have seen a watered-down Corporate Sustainability Due Diligence Directive (CSDDD) accepted by Member States in the EU, the passing of SEC but with legal challenges, and increasingly tangible and salient Corporate Sustainability Reporting Directive (CSRD) requirements for applicable organisations. In the voluntary ESG reporting world, SBTi ‘removed’ several climate commitments of some of the world’s largest brands and followed up with a statement weeks later allowing companies to use Environmental Attribute Certificates to help meet Scope 3 reduction targets.
The Need for Robust ESG Data Governance and Ownership
Underlying these changes, the need to identify, assess, and prioritise aspects that are material for businesses has never been more important. Strong ESG data governance and the ability to respond to shifting priorities with clear, transparent, and auditable data baselines, collection processes, and reporting strategies are integral to success. –.
Businesses armed with accurate ESG data, clear data ownership, and a strong data governance framework build credibility with investors, campaigners, and the market. Leaders consolidate their position as genuine advocates for societal well-being, resonating with consumers who are increasingly conscious of the impacts of their purchasing decisions. In Europe, this will be increasingly important with the recent passing of the EU Green Claims Directive where organisations could face fines worth at least 4% of the annual turnover for vague, misleading, or unfounded ESG claims. These developments make it essential for organisations to have streamlined, auditable ESG data management systems.
Building an Effective ESG Reporting System
Your ESG reporting programme should be underpinned by robust ESG data governance and data management processes. You can achieve this by implementing a secure, framework-aligned, integrated ESG data management software system that tracks improvements in ESG performance. Implemented correctly, this will position you to speak confidently and openly about your ESG data and progress. While an integrated digital ESG management system requires upfront investment, it should offer a short-term return on investment by saving staff time on manual reporting processes, data management, and assurance. You should also be able to quickly generate final reports to achieve compliance in the given format- for instance, XBRL.
There are many software solutions for ESG data management, so how do you choose which one is right for you?
Key Criteria for ESG Platforms
Through our experience of developing digital solutions that drive transformation in ESG management, we have identified six key features that are essential for an effective ESG data platform:
1. Configurability and Integration with Existing Systems
Businesses often have their ESG data held in disparate systems – Excel, CRMs or simply a mass of emails. Your selected platform should collect and integrate your data in a way which rapidly meets you where you are. Advanced platforms also support API integrations, which enable seamless data transfer and real-time updates. This connectivity simplifies the tracking of ESG metrics across departments, making the entire data pipeline cohesive and manageable.
2. Alignment with recognised ESG frameworks
The inclusion of frameworks such as the European Sustainability Reporting Standards (ESRS) or Global Reporting Initiative (GRI) is vital to ensure consistency and comparability in reporting. Aim to choose a platform which includes the frameworks you need or enquire about the bespoke addition of ESG frameworks you need to respond to stakeholder requirements.
3. Technical know-how and sustainability advisory experience:
ESG data management does not take place in a vacuum. Aim to work with a provider who can help align with other facets of your ESG data strategy. For instance, providing support and experience on CSRD reporting compliance requirements and data management. Having a breadth and depth of expertise on ESG topics is essential to helping you address the impacts, risks and opportunities that are most material to your sustainability goals and identifying the commercial opportunities that these could present.
4. Security
This is paramount to safeguarding sensitive ESG information and ensuring compliance with privacy regulations. The tool should incorporate robust security measures to protect data integrity and prevent unauthorised access, such as multi-level encryption. Regular ethical hacking and an incident management process are also indicators of best practice. As a minimum, seek out platforms with an information security management certificate, such as ISO 27001 to safeguard data integrity.
5. Accessibility and ease of integration
An ESG data platform that integrates with your existing systems and utilises an intuitive, logical interface which minimises the need for training is key to facilitating a seamless adoption and maximising operational efficiency. An accessible platform increases data input accuracy and can lead to better and more comprehensive data insights.
6. Traceability and data quality assurance
Requirements such as CSRD are seeing increasingly complex audit requirements. Ensure that your selected platform includes detailed audit trails, giving you the ability to report fully and in line with your strategy. For instance, ensure you can build reports in line with any potential data request and all outputs can be fully evidenced or referenced for auditing purposes. Where you (or a 3rd party) are undertaking quality assurance, this should be undertaken directly within the platform to maintain data integrity and save time. You may also wish to engage experts to support in your data review, pre-audit- Anthesis can support here.
Choosing the Right ESG Data Management Platform for 2024
By evaluating potential tools based on these criteria, you can select the solution that provides you with confidence in your ESG reporting. This will empower your decision making, enhance stakeholder engagement, support your ESG initiatives, and ultimately enable you to boost your sustainability performance – positioning your business to succeed.
Our ESG data management platform, Mero, has been designed to simplify ESG data collection and management and integrate sustainability into your business strategy seamlessly. Backed by over a decade of expertise, Mero has supported over 200 organisations to navigate their ESG reporting and sustainability journeys.
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Find out how MERO can transform your business
Explore how MERO can empower your organisation’s ESG data management and help meet compliance needs seamlessly. Book a demo to see firsthand how Mero can support your journey to effective ESG data management.
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