Demand for sustainable consumer choice has pushed organizations to rethink where and how services and goods are sourced, manufactured and marketed.
But the growing consumer might of Millennials and GenZ are not the only forces reshaping a more sustainable marketplace. Investors, regulators, and NGOs continue to demand greater transparency and metrics to identify corporate progress toward sustainability and - predominantly - reduced climate risk exposure. aThe acronym for these metrics, ESG, has become omnipresent in the boardroom, at the regulatory agencies, and in the minds of consumers.
ESG reporting is the disclosure of environmental, social, and governance data. ESG factors are increasingly being used to identify major risks as well as growth opportunities for stakeholders.
Metrics of an organization's environmental impact and sustainability, including (but not limited to):
Metrics on a wide range of social interactions including:
Metrics on how an organization is managed, including:
ESG reporting is becoming increasingly important as environmental, social, and governance issues grow more prominent. With reporting, organizations, both in the private and public sector, have the opportunity to not just disclose metrics, but communicate their values and mission. They can use ESG reporting to build meaningful connections with key stakeholders and recognize, respond to, and lead cultural and social shifts, indicate their current strategies and efforts, and share what's to come in the future. A credible ESG profile helps ensure a company's long-term viability and recognized value within the industry and public sector, as well as provide additional criteria for benchmarking against peers.
There is a growing pressure from stakeholders, including board members, citizens, employees, investors, and consumers, for organizations to produce tangible results backed by accurate and transparent data. Organizations interested in ESG reporting must understand what motivates their organization’s need to report (compliance, internal, external), identify who is requesting disclosure, take into account stakeholders interest, and choose a framework accordingly. Different frameworks target different stakeholder groups, some focus on certain topics whilst others remain broad.
Various scoring systems have developed in response to the increased demand to measure a reporting entity's ESG performance for investment decisions. To lessen the subjectivity of more arbitrary ratings, many organizations prefer to report to internationally recognized ESG frameworks, some of which will compare them to their peers and provide an ESG score.
Popular ESG frameworks include
Environmental data is not only the most difficult to collect and track, but it is also the most important data to support efforts to reduce carbon emissions and demonstrate actual climate action. Environmental factors such as water, waste, pollutants, energy, as well as metrics necessary to support greenhouse gas (GHG) emissions accounting across Scopes 1, 2, and 3, are captured under the "E" of ESG.
The majority of the data required to quantify these factors is generally dispersed among several sources, complex, hard to access and in some cases, non-existent. Current data collection approaches are inadequate for managing ESG data amid stakeholder and regulatory pressure, especially when organizations report to multiple frameworks and produce multiple deliverables. Because ESG initiatives need defined targets, specialized data collecting and analysis, and strategic planning, accurate data is essential for the success and impact of these efforts.
NZero automates data collection directly from the source and calculates greenhouse gas emissions to streamline accurate environmental reporting. We recognize that environmental reporting is extremely difficult; yet, the significant financial, operational, and environmental advantages far surpass these challenges.
The streamlined data collection and calculation methodology we developed makes it possible to move from static, outdated measurements and reporting to informed, effective, and strategic action.
Customers of ours can easily develop audit-ready reports and engage stakeholders on carbon reduction measures on a regular basis. Our environmental data is compatible across ESG frameworks, complying with the GHG Protocol and being consistent with TCFD, GRESB, CDP, SASB, and GRI.
Staying on top of ESG reporting requirements can be a challenge for any reporting entity – especially those reporting to several frameworks. This process is made easier by having a centralized platform with accurate data to start with — one that meets the same requirements as financial data.
When it comes to environmental metrics, we emphasize accuracy, automation, and auditability, and organizations who utilize us for the "E" in ESG will be well equipped to handle and satisfy their various ESG responsibilities.
As the built environment faces mounting climate challenges, it's clear that the need for proactive, strategic solutions has never been more urgent. Executives and technical leaders must seize this moment to reshape how we manage assets, optimize resources, and plan for a more sustainable future.
