environmental sustainability

Emerging Challenges for ESG Reporting

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What would your business do without its key stakeholders, such as investors and customers? The short answer is that it would rapidly ebb out. Now, all of these stakeholders want to see one thing: a responsible enterprise. This leaves you with no choice but to embrace ESG reporting fully.

ESG sustainability reporting is the disclosure of a company’s operations and implications in three main areas; environmental, social, and governance. Think of it as a holistic process that touches every aspect of your enterprise to make it better. This means higher productivity, more profits, happy staff, and reduced negative impacts on the environment. It is the ultimate business model that everyone would want to see.

While the benefits of ESG sustainability reporting are desirable, the process is not always easy. Remember that creating a report that does not adhere to all principles of ESG reporting could easily make your company’s efforts labeled greenwashing. To help you out, this post looks at the emerging challenges for ESG reporting and how you can avoid them.

Costs Associated with ESG Reporting

The idea of ESG sustainability reporting can help to take your enterprise to the next level, but at what cost? The truth is that it comes with some costs which will be added to the already existing expenses. This is considered a challenge because many companies have been working on ways to cut down costs because of the market dynamics, especially those caused by the COVID-19 pandemic. So, what exactly can you do about costs?

The good thing about ESG reporting is that it is flexible enough. See: there is no one saying that you overhaul the entire firm in a day or month. To keep the cost low, you can create a long-term plan where sustainability will get ingrained into the main operations. For example, you do not have to buy all new machinery at first. Why not start with top-notch equipment maintenance, staff training, and changing raw materials? Then, you could target to change machinery in the next two or three years.

Greenwashing by Other Companies

One emerging challenge about ESG sustainability reporting is that a lot of companies have been involved in greenwashing. This has made stakeholders skeptical about the reports they get. Therefore, you have to go the extra mile to ensure that the data is accurate, information verifiable, and the report easy to read. 

Although firms that are greenwashing their reports cause a lot of harm, we see this as an opportunity for your company to stand out. Instead of just creating ESG reports and publishing them, you can intensify stakeholder engagement at all stages of the company operations. Also, create channels that any stakeholder can use to confirm the information provided on the report. If you have managed to cut down emissions, involve experts and let them add credibility to the report.

Selecting the Right Software for ESG Reporting

One fact about ESG sustainability reporting is that trying to do it manually will not work. There is so much information and analysis that requires to be done. For example, how do you combine the data about emissions with staff training and your impact on the supply chain? Instead of following this hectic route, the best alternative is working with an appropriate ESG sustainability reporting software.

Good apps can help you to collect data correctly, automate information gathering, and make the entire process cheaper. For example, you can set the program to allow team players in ESG reporting to add and manipulate data. Indeed, you can even pre-generate the report structure so that data is added automatically. When it comes to information that is already in your management system, the ESG reporting app you select should be able to lift it with only a few clicks.

These are some of the emerging challenges and you need to craft good ways of overcoming them. Particularly, you need to have the right software and Diginex.com can provide the best. Visit them today to talk to an expert and pick the best software for sustainability reporting.

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