Collecting and analysing ESG data is a complex task. We highlight five tools that help cut through the complexity and effectively analyse your ESG data.
The acronym ESG (environmental, social and governance) was coined in 2005, but it's only in recent years that businesses have felt pressure to show they meet increasingly rigorous ESG targets. At the heart of that is data. Indeed, management consultancy firm Opimas revealed that the global market for ESG data could exceed $1.3 billion this year.
That being said, there are sometimes issues with the data quality. At the moment, UK stakeholders are somewhat distrusting of ESG reports, with a study by PwC highlighting that just 20% of investors believe current levels of ESG reporting are "good quality" – lower than the global figure of 33%.
The term ESG data covers all information about the impact an organisation has on its surroundings and people. It encapsulates diverse metrics across the three pillars, including but not limited to:
Businesses use ESG data to help shape their ESG strategies, quantify progress on goals, assess performance and impact, and identify risks and opportunities. Collecting and publishing ESG data is also a way for firms to show their values, purpose, and commitment to environmental, social and governance principles.
As part of shaping ESG strategies and showing commitment, organisations use internal data collection tools and ESG frameworks like the Global Reporting Initiative (GRI) and the Value Reporting Foundation to create ESG reports.
Both mandatory and voluntary factors influence the type of data firms need to collect and how they use it. Stakeholders – investors, employees and customers – who read ESG reports are scrutinising data more closely and demanding greater transparency. This increases the need for more streamlined and digitised collection and analysis processes.
Regulatory pressure also comes into play. For example, as of April 2022, it became compulsory for over 1,300 of the largest UK-registered businesses and financial institutions to report risks and opportunities in line with Task Force for Climate-related Financial Disclosure (TCFD) recommendations.
Alongside that, smaller companies may choose to disclose information voluntarily, getting ahead of potential future policy changes and differentiating themselves from the competition.
There are future regulations and associated data requirements to keep abreast of, too. For example, the International Sustainability Standards Board (ISSB) is developing benchmarks for ESG-related disclosures.
A core requirement is for sustainability reporting to connect to and complement financial statements. The requirements are expected to become part of UK law by 2024 or 2025; some firms may voluntarily adopt the standards by the end of 2022.
Good data underpins robust decision-making, but there are core issues around ESG data gathering, processing and reporting. These issues include:
ESG software can help manage and streamline data gathering and analysis. The best platform for your business depends on individual requirements and the industry you're part of. Here are just a handful:
We've been working in partnership with leading industry experts to align our ESG digital solutions with TCFD standards. As part of that, we offer five core tools that form the basis of our Compliance Portal.
Company policies are at the core of regulatory and standards compliance. With that in mind, our policy hub tool provides a powerful solution which enables businesses to create, update, approve, communicate and seek attestation for values, behaviours and ethics that define their culture.
By using our policy hub, you're armed with a one-stop data collection and management tool that automates processes and demonstrates corporate responsibility and compliance to auditors, regulators and stakeholders. The solution also enables granular analytics of employee completions.
Once you have an ESG policy in place, it's essential to ensure employees understand it and that their behaviour aligns with it. Our customisable courses are updated throughout the year, ensuring users have the latest and most relevant information.
Our digital declarations tool automatically collects and tracks employee disclosures like conflicts of interest and outside business interests, simplifying and streamlining the process for you. Moreover, the solution centralises data, enabling efficient analysis and the creation of audit-ready reports.
Gathering employee feedback is an important part of any ESG strategy, helping identify risks and knowledge gaps. It also informs decision-making and improves morale, engagement and performance.
Our customisable digital survey tool allows companies to collect ESG data and monitor topics like diversity, inclusivity, cybersecurity and well-being. Key features include automated survey management and the ability to export results for granular analysis.
Registers are vital when it comes to compliance. In line with social responsibility and initiatives, companies can use a gift register to track charitable donations, volunteering, fundraising as well as community and sustainability projects.
Our efficient compliance registers tool allows organisations to manage events and actions in one place, analyse data and create audit trails. It's also customisable to individual policies, structures and procedures.
Data is at the heart of ESG-related decisions, giving companies the information they need to set and track goals, disclose, and outline their values. However, there's a distinct lack of trust regarding ESG data.
With that in mind, investing in tools that offer a way to gather unbiased data, improve transparency, and help businesses stand out from the crowd in the ever-changing ESG landscape is essential.
We're proud to be part of the conversation at the #RISK conference, where we explore the tools needed to make intentional, beneficial decisions based on high-quality ESG data.
If you'd like to stay up to date with best practices, industry insights and key trends across regulatory compliance, digital learning, EdTech, and RegTech news, subscribe to Skillcast Compliance Bulletin.
To help you navigate the compliance landscape, we have a suite of RegTech tools that include Compliance Declarations, Policy Hub, SMCR 360 and Events Management System. Our RegTech Buyer's Guide provides an overview of how to implement this technology and how it can improve your compliance training.
You can keep informed on compliance issues, attitudes and risk perceptions in the UK workplace through our Compliance Insights blog. And our searchable compliance glossaries explain key terms and regularly report on learnings from the largest compliance fines resulting from regulatory breaches.
Last but not least, we have 100+ free compliance training aids, including assessments, best practice guides, checklists, desk aids, eBooks, games, handouts, posters, training presentations and even e-learning modules!
If you've any questions or concerns about compliance or e-learning, please get in touch.
We're happy to help!