How to get started with strategic ESG reporting
A new EU directive has come into force – the Corporate Sustainability Reporting Directive (CSRD). This means that it will be necessary for larger companies to make their sustainability efforts visible through an ESG report.
For small and medium-sized enterprises, it is still a voluntary affair, but at the same time, it is also a unique opportunity to shortcut both strategic development and commercial advantages. An ESG report filled with figures about the company’s climate footprint, social responsibility, and management situation is more than just fulfilling a requirement.
It is an effective compass pointing towards concrete improvement opportunities. Therefore, a solid ESG report can be used as a powerful tool for the company’s strategic planning and marketing. Here are some tips on how you can make ESG reporting a part of your commercial game plan.
Make ESG reporting a strategic advantage for your business development
It is easy to drown in buzzwords like “green transition,” “climate crisis,” and “equality.” But remember, your ESG report is a light in the dark. It provides you with tangible data that can guide you through the necessary changes.
Let the report’s data be your foundation when setting future goals:
- How much should your climate footprint be reduced in five years?
- What percentage of your team should be employed under social conditions?
- Is it time to hire more apprentices?
Make a plan for the necessary investments to achieve your goals. But remember, you don’t have to handle everything at once. If your climate footprint is minimal, consider focusing your investments on social aspects such as diversity, wage differences, and social employment requirements.
Great marketing potential
An ESG report offers much more than benchmarks for internal planning.
- You can also use it to boost your marketing initiatives – including Employer Branding.
- Use the report to strengthen your brand and stories about the company’s values. Taking care of an ESG report, even when it is not a legal requirement, signals that you care about the company’s responsibility.
- You can use the report as part of your sales material for both new and potential customers and markets. As companies set higher standards for their supply chains, those who have already collected and published ESG-relevant data will stand stronger.
- The report can also be broken down into smaller pieces that serve as small insights into your sustainability work. They can be used on social media, in newsletters, and other communication platforms.
- Last but not least, you can use the good results in the report to attract new employees. The report can show your work in contributing to, for example, reducing emissions and improving the work environment, which can be significant when attracting potential new employees to your company.
How do you report?
Producing the report can be complex and time-consuming, but it doesn’t have to be. Data for a large part of the climate accounts can be extracted from your ERP solution. If your ERP system is cloud-based like Business Central Online, you can use the BeWo app to scan your ERP for emission data.
BeWo uses an AI engine to scan all invoices in the system and can, based on these, perform a calculation and generate a report that can be used in your overall ESG reporting. BeWo finds and calculates data on the 3 emission scopes described in the Greenhouse Gas Protocol (GhG).
Other environmental data can be stored with product data in your PIM system. When you store data about your products’ measurements, dimensions, sizes, and qualities, you will also be able to store data about, for example, packaging use and handling of recyclable waste, as well as more precise Scope 3 data (indirect Supply Chain data).
Regarding social data, you should consider a data warehouse that can collect and consolidate data from, for example, HR systems, payroll systems, and time registration for reporting in, for example, Power BI. You can collect all ESG data in your data warehouse and build the final report in Power BI.
There you can show your goals and ongoing development with ESG work. It is no longer good enough just to say that you work “sustainably” or with ESG initiatives – it will actually be illegal and fall under the term “greenwashing.” Your report must be able to document the initiatives and have an audit endorsement.