There are many difficulties with ESG reporting. Many people complain that they don’t know where to begin because it is totally dissimilar to anything done by them ever before. However, thanks to the ESG solutions agency in UAE that can simplify the ESG reporting tasks for organizations.
Moreover, there are still a few people who continue to hold this view and even conflate “ESG” and “sustainability,” using the words interchangeably.
As a result, let’s understand ESG reporting first before we discuss the difficulties with it and how to address them.
The act of gathering data on the environmental, economic, and regulatory performance of a company and documenting it in an orderly manner that is typically in compliance with an ESG reporting framework is known as “ESG reporting.”
Let’s simplify this further because it seems complicated. In essence, ESG reporting entails:
- Selecting a reporting methodology for ESG factors.
- Choosing appropriate environmental, social, and regulatory objectives, measures, and KPIs.
- Gathering operational information.
- Preparing the information for a particular audience and purpose by filtering and organizing the data.
Now that you have understood ESG, let’s learn the common challenges faced in ESG reporting.
Spreadsheets
Excel spreadsheets are arguably the main issue sustainability professionals face. This is due to the fact that many companies actively monitor ESG data, make calculations, and produce reports using spreadsheets.
What is the problematic part then? Spreadsheets have many disadvantages, including manual mistakes in data entry, broken links across workbooks, the failure to cooperate, and an inadequate level of information privacy. Additionally, the spreadsheets utilized to handle ESG data are typically created by a single individual and contain functions and formulas that only that individual is familiar with.
Quality of data
Spreadsheets not only make data collecting more difficult than it should be, but they also reduce the effectiveness of QA/QC. It is challenging to QA/QA decentralized, manual systems since it necessitates numerous data entry and review procedures. This implies that handling the same data multiple times is necessary for any type of reporting, which would include ESG reporting. Of course, this isn’t the most efficient utilization of your team’s efforts.
However, upholding good standards is crucial for your data for the success of your company. When reading your ESG reports, shareholders and other participants anticipate reliable information.
Setting up your ESG and KPIs metrics
It could be challenging to choose which metrics to monitor because businesses sometimes want to gather data on something that could be tallied, even though all of this data is not going to be useful or even relevant. Due to the abundance of available reporting formats, this gets more challenging with ESG reporting. Every framework has a different idea of which metrics and data are most important.
All of these different challenges can be easily overcome by hiring a reliable ESG solution-providing company. Hire the most reputable services and get the most effective results.