SOURCE: Workiva
DESCRIPTION:
By Mandi McReynolds, Senior Director, Environment, Social, and Governance Workiva
Corporate purpose has been redefined. Today broad sets of stakeholders–not just shareholders– hold companies accountable for their progress against ESG factors. Cost of capital, employee retention, shareholder trust, and customer loyalty all hang in the balance of ESG performance metrics – with stakeholders ready to question ESG disclosures if they are not backed up with robust evidence and reporting.
To implement transparent ESG reporting which not only meets regulation but builds trust with stakeholders, finance and ESG departments will need to work hand-in-hand. While finance teams are familiar with handling structured and unstructured data to value and protect intangible assets, ESG standards are new territory. ESG leaders accustomed to these standards will need to work closely with finance to navigate gathering and validating ESG data from across the business.
This partnership between finance and ESG departments is crucial if organisations are to achieve the transparent reporting required to foster trust with their stakeholders. Unfortunately, widespread “greenwashing” has resulted in scepticism and general distrust around how companies display their ESG credentials. According to a recent Workiva survey, 52% of UK investors find it difficult to trust a company’s actions and what they say, when it comes to the environment and society.
Against this backdrop of mistrust, transparent and authentic ESG has become a business imperative. As a result, organisations are looking for ways to overcome challenges around the quality of data, particularly issues with version control, to ensure robust reporting. To achieve consistent and auditable data, they must focus on centralisation, collaboration, and automation. The digitisation of new online filing is secure and automated, revolutionising the reporting of ESG data. Companies can bid farewell to data that is scattered across multiple departments and siloes creating complicated reporting structures, by moving to a clearer, centralised ecosystem for online collaboration.
KEYWORDS: Workiva, NYSE: WK, Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD
