With the constantly evolving regulations and growing social pressure, organizations today struggle to remain ESG-compliant. For most, manually collecting, reporting, and analyzing data to adhere to environmental, social, and governance (ESG) standards is error-prone and time-consuming, leading to more significant, unnecessary risk. However, organizations are setting examples of maintaining compliance using practiced tech-driven strategies. Below, we’ll talk about how technology can help make the process more manageable. Continue reading to learn more.
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Automate collection of data performance
With the increasing velocity of the changes and the introduction of new regulations, the complexity and volume of ESG data keep growing. This makes automation and streamlining the time-consuming manual KPI collection process more critical now than ever. However, the gathering stage and back-and-forth communications can slow operations down before the teams get the opportunity to process the volume of data they receive. In addition, audits and further calculations are performed using less-specialized tools and lacking centralized intake points that lead to sources of facts creating risk and inefficient workflows.
The data-gathering process alone may take a considerable amount of time to achieve. Moreover, processing and auditing data usually require expert knowledge and time, bottlenecking the reporting workflow and resulting in outdated information. To overcome this, companies automate the process via news API for monitoring ESG risks and collecting and analyzing data. As a result, the process becomes more streamlined and efficient, leading to fewer errors and risks.
More often than not, sustainability departments lack the resources to gather data regularly from different sources. In addition, after collecting the data, the error risk in calculations is still high because of the data processing’s manual nature. Introducing document automation can help ease the workload. Businesses can use standardized templates in conjunction with other ESG performance tools, creating an information processing and collection workflow with the necessary calculations processed automatically. In doing so, it enables users to regularly generate scorecards of current standings, accurately communicating strategic processes.
Having the capacity to regularly audit and track investment performances within the context of ESG can be beneficial, especially to financial enterprises and investment firms. Generally, these checks are performed via lengthy questionnaires and wasteful back-and-forth communication. Furthermore, lacking centralized auditing trials may expose a business to risk. With the implementation of investment checking software, companies can conduct regular audits for their ESG according to their internal requirements. The addition of a centralized database also enables ease of communication with stakeholders.
Social data-gathering workflows using outdated tools can create inconsistencies in demographics and activity monitoring. And if the data are in emails, documents, and disconnected spreadsheets, they may not be as accessible as they should be. This makes it much harder to communicate social target information to the stakeholders. With social performance software, collecting data regarding company performance becomes more efficient since it can be specified based on the desired social criteria. A streamlined process also leads to transparency on social performance.
ESG compliance doesn’t always have to be a massive undertaking. While it does have its fair share of complexities, leveraging technology to create standardized workflows can maximize efficiency, minimize errors, lower risks, and lead to a more successful business.