Predict & Influence Muses - Series 013: Organisations’ carbon journey: The starting point of ESG compliance

ESG is a buzzword lately, much akin to big data analytics 10 years ago, or AI 5 years ago.?Similar to the situations then, Organisations, be it corporate or government agencies, are trying to find out more, in this case to prepare for the eventual ESG reporting. Depending on the size, resources of the organisations (i.e. whether these organisations are public listed companies, or have mandatory disclosure needs, or expose to global supply chain), their readiness are uneven.

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There are large organisations, i.e. Fortune 500 companies that are more “ready” (more to this later), where they can have a large team headed by a Chief Sustainability Officer that handling this full time or part time, and may be with the help of external consultants, so that they can achieve the disclosure, compliance, and green improvement as desired. However, the smaller “large organisations” those that are publicly listed, but probably not the super large, indexed-link companies, or most government agencies, would be struggling to get started.

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Moreover, even for the large organisations, it is not a walkover for them. While their resources are much bigger and more ready, they have many subsidies and associated companies. At the group level, they are able to, in a way, “force” their subsidies and associated companies to submit required data to them and for them to consolidate and report on the group level, their subsidiaries and associated companies may be struggling for resources too to handle this.

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For so many moving parts, how to these organisations get started? For one, let’s tackle the “E” in the ESG first (though let’s do not forget the “S” and the “G” – that will be for another Muses down the road), as the corporate systems like an ERP will likely have most, if not all of the data points needed for Scope 1, 2 and 3 reporting. Next, find a tool that perform the accurate 1-time (assuming the underlying data structure does not change) mapping and conversion, performing necessary data cleansing and validation, and to use industry-grade carbon emission calculator for accurate reporting. Choosing the Carbon Journey Reporting tool that is able to comply with major ESG standards, like TCFD, GRI, and coming soon, IFRS Sustainability-related Reporting.

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The data from the corporate systems will map and flow nicely into the ESG data platform. If there are data gaps, a workflow required to be created to collate data (read: human compiled data in CSV or Excel) to send to the respective Persons-In-Charge, whose submission of data to be based on an agreed service level agreement (SLAs) and the submitted data will be logged for auditable purposes. This created a standardised climate and environment related data platform within the organisation, a place where trusted data can be traced and audited. Report generation, whether it is for regulatory reporting, or submitting green financing loan, or as part of the document to be requested by large MNCs to become their suppliers, will be easy and seamless. Subsequently, situation analysis, peer analysis, supply chain analysis can be derived from this data platform.

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Such tool will be of great help for organisations to get started on their organisation carbon journey, though a lot of work still has to be done to get the trustable data into this data platform.