Tools to measure, report corporate sustainability for investors

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With the rise of the sustainability and climate change movement, the sustainability reporting landscape is rapidly changing and increasingly requires companies to be more transparent with stakeholders.

Five Forces: Planet, People, Customers, Governments and Investors will run on innovation, changing mindsets and commitment to a better future. If we don’t all come together, we won’t get the exponential results we are capable of delivering. The Shangri-la of reporting will have integrated thinking and a love for the planet fully reflected!

One method by which companies of all sizes can supplement these requirements is to adopt the concept of ESG in their operations. Environment examines the company’s impact on the greenhouse effect (carbon footprint), water consumption and waste management. Social examines the company’s interaction with the stakeholders it engages with both internally and externally, and the reputation it fosters. Governance includes the policies that lead to effective decision-making within the organization.

Benefits of ESG practices for investors

Here are the benefits investors will enjoy if companies follow ESG practices.

Competitive advantage: Companies that take steps to increase diversity, improve health and safety policies, give back to their communities and follow sustainable environmental policies strengthen their competitive positions.

Long term growth: Companies with strong ESG initiatives focus on improving risk management and innovation. This makes it possible to benefit from protection in the event of an economic or social crisis.

Increased opportunities for businesses: Pursuing sustainable and inclusive business models has the potential to unlock economic opportunities worth at least $12 trillion per year by 2030 and generate up to 380 million jobs.

Efficiency and savings: ESG promotes cleaner, more efficient practices that reduce operating costs and a company’s environmental footprint.

The preparedness of Indian companies for the ESG movement is evidenced by the dynamic introduction of the Corporate Responsibility and Sustainability Report (BRSR) by the Securities and Exchange Board of India (Sebi), which encompasses the requirements of global standards, such as the Global Reporting Initiative. (GRI) and the Sustainable Development Goals (SDGs). India certainly enables corporate engagement to create a better future for our next generations. BRSR is an effective compliance and communication tool to assist companies with their non-financial disclosures and help bring comparability between companies to guide investors and other stakeholders.

Companies with strong ESG initiatives focus on improving risk management and innovation. This makes it possible to benefit from protection in the event of an economic or social crisis.

These rapid changes require the creation of tools to help companies in their compliance. Here, a sustainability platform/tool ​​can help:

1]Companies assess where they stand according to global best practices, in line with global sustainability guidelines.

2]Companies understand the gaps between its performance and guidelines.

3]Implement enhanced actions to continuously improve and achieve global best practices.

The main concentration concerns are:

1) Science-based commitments and targets.
2) Materiality and review of priorities.
3) Measurement of data sets.
4) Elimination of greenwashing.
5) Clarity and purpose of processes, results and final reports.
6) Certify the accuracy of the final results.

The need to harness the benefits offered by technology becomes important as it is one of the main drivers of business change. Digitization helps new age reporting become easy and accurate at all times. It allows the scalability of solutions. Technology helps facilitate organization-wide engagement in forms of digital workflows for execution.

Similarly, materiality or analysis parameters can be customized for each business unit, depending on their area of ​​activity. This helps companies provide accurate sustainability reporting to all stakeholders. Adopting ML-AI-Analytics, IoT, Web 3.0 and Blockchain and an ability to drive results as risks emerge on the horizon.

One such sustainability tool that is pioneering in the ESG sector is GovEVA. It is an ESG lifecycle management software that helps companies on their end-to-end ESG journey via a Saas platform, turning the value-creating power of ESG into measurable results.

Facilitating the concept of ESG in an organization is a very important task for every company that the entire management of a company must understand. From the board of directors to employees, supply chains and end consumers, everyone should be enlightened about this concept if the company really wants to move in a sustainable direction.

The author is an independent director at L&T Finance Holdings.

(Disclaimer: The views expressed are those of the author and Outlook Money does not necessarily endorse them. Outlook Money will not be liable for any damages caused to any person/organization directly or indirectly.)

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