Effective ESG data collection is essential to meet sustainability goals and specialist software could help in this regard but additional training is needed to make it more effective, according to representatives from the engineering, banking and IT consultancy sectors.
Speaking on a Reuters webinar on collecting sustainability data, Sandra Schoonhoven, head of the climate risk initiative at ING, said that ESG data was an "enabler" for companies to meet the regulatory demands on transparent environmental and social disclosures. But data collection also plays a role internally to build a "better understand of what the impacts of a changing landscape is going to have on you as a company".
Ben Goodare, head of sustainability at engineering company, Renishaw, said that he has a love/hate relationship with ESG data because Renishaw operates in 38 different countries, the quantity of data they have to produce, on emission for example, makes accuracy difficult.
Like Schoonhoven, he said it helps to tell the story externally but also make "improvements and work towards a target", as well as drive business decisions.
He gave the example of Renishaw wanting to transition to an electric vehicle fleet but, after looking at the data, they realised it would create more emissions in certain countries than petrol vehicles.
But how to collect this data efficiently and accurately?
Goodare said that Reinshaw had previously used spreadsheets, but this was time-consuming and susceptible to mistakes so they have adopted a specialist ESG collection software which he said has been easier to maintain and allows continuous access to the data.
Preyasi Patel, senior consulting manager at IT consultant at Sphera, said: "Non-financial reporting is becoming as important as financial reporting and because of that there needs to be rigour around it in terms of verification."
While she accepted that spreadsheets can be more straightforward, she warned that companies risk losing their "auditable trail of information" if they use them, which could cause problems when disclosure regulations come into effect.
Shoonhoven said that ING will probably get specialist software in the future but that they are "not completely satisfied in what is out there," as they are not convinced the technologies are suitable for every data need.
As software solutions develop, she said, there will be a need to teach IT experts important information on sustainability issues so they can better understand what data is important for the company.