Translating ESG: from data maze to relevant reporting

ESG reporting: three major challenges

Rightly so, a lot of companies act before they feel the pressure from European regulations or their stakeholders. They swing into action and work on an ESG action plan. Once they know which ESG factors are important to their organization, three major challenges await them in translating their ESG approach into measurable and reportable objectives:

• According to what framework and standards should a company report?
  There are an estimated 600 reporting standards worldwide, a dozen of which are very popular and two are leading in Europe (CSRD and IFRS). How do you find out which standard is the right one for your operating activities, your industry and your stakeholders?
• What data should a company use and from which relevant data sources? ESG covers a wide range. From data showing carbon emissions to data mapping labour turnover. It involves not only quantitative, but also qualitative data. Not only structured, but also unstructured data. It is a complex exercise to connect the right data and data sources to your ESG action points.
• What ESG software should a company use?
  To arrive at a relevant ESG report, you need a range of sources. They all have their own data points that must be converted to ensure they can be compared and reported. From simple excel sheets to HR analytics software tools that have the reporting of HR parameters already integrated. All resources must be brought together, streamlined and linked. What software ensures that raw data, at some point, results in a report that maps your ESG policy and is audit-proof?

The right ESG framework

ESG standards and frameworks were developed independently by different parties. And each framework places a different emphasis. The result is a range of ESG frameworks which companies can choose from. From 2024-2025, the CSRD Directive and EU Taxonomy will become leading for large European companies and listed companies that are required to do ESG reporting. The question now is whether those companies that report voluntarily or those not covered by the CSRD Directive will also opt for the CSRD framework in the future.

Moore can certainly advise on this. Whichever framework you choose: when choosing a standard, our experts recommend to carefully consider and document which standard is most relevant to:

• The size of your company (SME or large/listed company)
• Your specific operating activities
• Your strategic objectives
• The industry in which you operate
• The interests and needs of your stakeholders (employees, customers, suppliers, policies ...)

Moore has already guided many companies in choosing the right ESG reporting standard. Our experts are happy to think along with you and assist you in making the right choice.

Efficient data collection

The data you need to make your ESG ambitions and results clear and reportable are present in your company in different formats, sources and systems. They need to be collected, processed and analysed. At this stage, many companies get entangled in a mess of data and data sources.

With the right approach, you can save a lot of time and effort. These tips will help you get started:

• First, map your data sources. Identify where the necessary ESG data comes from. These can be internal sources, both financial and operational systems and data, or external sources such as supplier data and environmental information.
• Monitor data quality. Ensure that the data underlying your ESG reporting is of high quality and reliable. Incorrect or inaccurate data can lead to wrong conclusion and decision making.
• Invest in a central data management system. Implement systems that centrally store ESG information and make it easily accessible.

Moore is building ESG data platforms together with element61. The architecture of this Modern Data Platform ensures data will be stored, collected, processed, analysed and reported in a scalable and efficient way. The Modern Data Platform facilitates the acquisition of insights and ensures that you maintain an overview of the available data, regardless of their origin or format. The platform thus supports you to make informed decisions.

The platform enables you to store and process large amounts of structured (digital invoices, data surveys, digital meters ...) and unstructured data (often qualitative data that do not yet have a specific reporting unit or format). The data are collected in their raw form and then processed and prepared for analysis. Various ESG action points can be monitored via self-service BI solutions. Moreover, the data are available to a specific ESG reporting software so that they can be published, for instance, under the Corporate Sustainability Reporting Directive.

Finally, all steps in the data platform focus on data governance to guarantee the accuracy, reliability and integrity of the data and to ensure that the data are secure and can be easily audited.

The right ESG software

There is a lot of software available on the market that can support companies in managing and reporting ESG data. These tools range from simple data entry platforms to advanced reporting and analysis solutions. When choosing your ESG software, it is best to take these five considerations into account:

• Choose software that can integrate different types of ESG data and data sources (e.g. financial reports, environmental measurements or social performance indicators).
• Choose software that can generate customized ESG reports and the data that meets legal requirements, and the needs and expectations of your stakeholders. Be sure to take into account the software's potential for everything related to complex carbon dioxide calculation.
• Make sure your ESG software is audit-proof and can guarantee the reliability of reported data.
• Make sure the software you choose can grow with your organization's evolving ESG needs.

ESG is a work in progress

ESG is mostly a tailor-made process. The way you get started with ESG within your company - including translating your action plan into a report - should be tailored to the size of your company, your industry and the needs and expectations of your stakeholders.

Moreover, ESG is a marathon. A work in progress. Companies starting with ESG evolve from merely complying with basic obligations to developing a true ESG strategy.

Finally, it is important to see the full potential of ESG. The more strongly ESG is embedded in your company strategy, the more likely your ESG approach will uncover opportunities and deliver a tangible competitive advantage. After all, ESG not only provides protection against potential legal risks, but also acts as a catalyst for innovation, for attracting and keeping talent on board, for easier access to capital and for an increased interest of potential investors. Moore’s experts worldwide find that ESG frontrunners very often manage to translate their strategic investments in ESG into a stronger competitive position in their respective markets.

Our advice? Even if you have to start from zero, get started with ESG today. You’ll have the power to shape your ESG ambitions yourself. Moore's experts have acquired the most valuable experience and are happy to guide you through this ESG story.