…by Moving to Data-driven Sustainability.
In the coming years, more and more companies will be expected to measure and communicate their sustainability performance on a regular basis. With new regulations in place, such as CSRD or increased awareness towards sustainability practices, measuring and tracking ESG impacts is no longer an option.
According to the article, published by EY Saudi Arabia, it is expected that a total of 49.500 organizations will have to start providing information on a regular basis when it comes to their sustainability efforts while adopting a set of reporting standards and ratings.
Will these companies have the tools and skills to adapt to the new regulations and provide sustainability reports? But more important, is sustainability reporting the way for organizations to build a better world or it is just an exercise to comply with those regulations?
Sustainability Reporting 101
There has been growing support over the last years towards mandatory climate-related financial disclosures. However, the greatest challenge remains in finding common standards to report on the overall company sustainability efforts – not only the environmental side but also their economic, social, and governmental impacts (ESG).
The basic objective to measure and track your sustainability efforts in a report is to track the positive and negative impacts that your organization when it comes to ESG. Adopting one reporting framework – the standards or methodology – depends on the expectations of key stakeholders, like legislators, investors, or your company’s customers.
In theory, it is not only aimed to communicate your company’s sustainability ambitions but to prove that you are executing an action plan towards that. In actual practice, it is a report that on average has 200 pages, which does not invite the required action and collaboration for organizations to really achieve the impact needed to achieve change toward sustainability. An example of that is that since we started pitching our solution to all kinds of profiles – businesses, investors, competitors, we still have not met anyone that has read a full report on sustainability report (if you know someone, please tag him in the comments, it would be great to meet her/him).
Looking for common ground, working under GRI framework
New ways of sustainability reporting continue to come up, presenting various frameworks you can use. Choosing one standard or another will depend on which audience you want to address by compiling a report on sustainability. Here are some frameworks most used nowadays:
- Conventional sustainability reporting frameworks like Global Reporting Initiative (GRI) and Carbon Disclosure Project (CDP).
- International Integrated Reporting Council (IIRC).
- Climate Disclosure Standards Board (CDSB).
- Sustainability Accounting Standards Board (SASB).
When at Datalitiks we started working towards data-driven sustainability developing our solution, Data for Good, we faced the same dilemma that any organization would face: what to measure? How to measure? Which standards to choose? The fact that we wanted to build a solution that many organizations could subscribe to measure their ESG impacts in a standardized and easy (we handle the complexity for you) way, pushed us to do research on how to go about it. By understanding the previous options, we decided that Global Reporting Initiative was the way to go.
Global Reporting Initiative is the best-known providing companies with an inclusive and flexible framework. They were established in 1997, and since then, their framework design has provided to more than 10000 organizations covering over a hundred countries with a comprehensive and wide scope when it comes to disclosures.
Sustainable development Goals can be mapped out with their material topics, which allows organizations to not only understand their impacts but also how those contribute to the SDG Agenda set by the United Nations.
In addition, they are part of the consulting groups by public institutions when it comes to new regulations. For example, regarding the new reporting regulation that will come into place by the European Union when it comes to sustainability standards, GRI is involved with that. This gives peace of mind, that if you already are used to GRI, your organization will not have to change drastically once CSRD comes into effect. For all the previous reasons, we decided to adopt this framework and build our Data for Good solution under those principles. We are proud to announce that Datalitiks is the first member to join the GRI Community in Malta, and we will be working closely with their team to keep growing our knowledge while sharing the benefits that this framework brings when it comes to measuring and monitoring ESG impacts.
Challenge the status quo, innovate
Compiling a report on sustainability report is not an easy task. As part of the number of different disclosures that are available, you need to understand the organization’s context, their value chain, while gathering the data, putting it together, and compiling it in the best way possible.
It becomes a harder challenge considering that with the current context when it comes to the needed labour market, is very rare to find people with the required skills in sustainability and data This explains how costly it can be to carry out those exercises by organizations and, why we are still seeing those 200-page documents as the main result.
While you can learn a great deal reading those reports and see what organizations are doing toward sustainability, there are two main problems with that approach: it invites to little action and there is no room for collaboration.
If nothing is changed, those two factors together will slow down any potential progress that can be done to build a more sustainable world and contribute to reaching the 2030 Agenda. Something needs to be done differently, or at least, at Datalitiks we thought we needed to try a different approach.
Onto data-driven sustainability, doing Data for Good
At Datalitiks we wanted to do things differently when it comes to sustainability reporting to tackle the previous limitations described previously. Adopting a framework such as GRI, building a methodology around the present and future needs that organizations face when it comes to sustainability, and innovating by adding our years of experience when it comes to data and technology were the components that we needed to combine to challenge the current status quo.
The result is Data for Good, a solution that puts sustainability at the heart of the organization, aligns it with its business strategy, and involves employees in acting toward the ESG impacts that matter the most.
Giving visibility of the key metrics, while linking them to the related initiatives, allows organizations to adopt a data-driven approach, acting upon the data insights generated from our desktop solution Data for Good.
The standardization of metrics using GRI and its linkage with the sustainable development goals connects organizational efforts towards their impacts at a bigger scale. Enabling organizations using Data for Good to see how their contribution impacts the countries where they operate.
And if this is not enough to trigger action, we wanted to introduce some healthy competition to foster collaboration, by allowing organizations to share their initiatives with the rest using the solution with the goal to create a collaborative space based on transparency with one common goal: build a better and more sustainable while doing data for good.
This is how we do Data for Good at Datalitiks, and this has just started. If you believe in the use of data to unlock value and are interested in how we applied it to build a more sustainable world, reach out and have a chat with us.