Pitfalls to Avoid In Your Sustainability Reporting Process

More than any other time in the past, your company’s stakeholders want to see, understand, and verify your company’s sustainability performance. The realization that most of the global challenges can be addressed through responsible actions has jolted everyone to ask the big question, “What can I do to make the planet a better place?” As stakeholders emphasize responsibility, the moment of truth is dawning that every company needs to adopt the right ESG sustainability reporting in its systems.

Today, laws being passed by different jurisdictions are directly or indirectly calling for sustainability to be ingrained into business operations. In the UK, the government has already indicated that companies operating there will be required to follow the Task Force on Climate-related Financial Disclosures (TCFD) framework to report their efforts on sustainability starting from 2023. In Hong Kong, it has already happened, with HKEX requiring all listed companies to produce comprehensive reports annually. So, are you ready?

The process of implementing ESG sustainability reporting can be complex, and some companies end up making costly mistakes. You should not follow the same path, and we are here to help. Keep reading as we highlight some of the common pitfalls that you should avoid in sustainability reporting.

Using Incorrect Data

The idea of sustainability reporting is still emerging, but carries a lot of weight because of its potential to help address social ills. For some companies, the idea of ESG reporting is geared only towards generating the final report, but this is incorrect. So, such brands end up using incorrect data to portray their brands as sustainable while they are not. This is referred to as greenwashing, and it will be easy to note because all the information presented in ESG reports should be verifiable.

If your report is flagged down as greenwashed, there is a risk of losing credibility among your targeted clients. Even the current market share can easily chip off, requiring you years to regain the current position. This is why you should commence the process of ESG reporting by understanding the principles of accuracy and verifiability.

Trying to Do Everything at Once

The good thing about sustainability reporting is that you have the freedom to determine which path your company takes. However, this can also be a huge pitfall, especially for companies that try to handle everything at once. For example, it will be difficult to target cutting emissions from your company by 100% and stop all pollution coming from the company within a few months. When such efforts do not bring results, your targeted clients, investors, and other stakeholders are likely to walk away.

The best way to go about ESG sustainability reporting is carrying a comprehensive analysis of the company processes to identify areas of greater importance and focus on them. Instead of trying to cut down emissions by 100%, you might want to start by cutting 30% in the first reporting phase, another 30% in the second phase and the remaining in the subsequent two phases. This will help you to spread the resources and build capacity about the respective reporting topic.

Doing ESG Sustainability Reporting Manually

Sustainability reporting is a complex undertaking that requires you to have the right tools. Therefore, trying to handle it manually or with standard tools will no doubt result in failure. First, the process will be very complex because of the multiple parameters that need to be factored in and progressive analysis. This can be even more complicated for managers with a lot of work. The best way to go about it is using the best sustainability reporting software.

A good ESG sustainability reporting program makes it easy to understand the whole process, gather the right data, and analyze it correctly. You can even automate data collection for your reporting process to help increase the accuracy of the report. Why handle the process manually when it can be automated with the right software?

ESG sustainability is one of the most important tools for modern businesses, and it is crucial to do it correctly. This post has highlighted some common pitfalls that you should avoid when doing ESG reporting for your company. If you find it challenging, consider bringing on board a professional, such as an ESG reporting consultant, to help. Visit Diginex.com now for all that you need about ESG sustainability reporting.

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