By: David Solsky, CEO & Co-Founder, Envizi
Survey of ESG professionals captures the state of ESG reporting and performance in 2021
No longer an afterthought, Environmental, Social and Governance (ESG) metrics have moved from the margins to the mainstream.
Envizi recently conducted a study to take a pulse on how ESG reporting and performance is being tackled. We culled the 150 responses down to 96 respondents with roles in sustainability, ESG, finance and procurement, and the C-suite. The respondents represented a wide range of industries including manufacturing, commercial property and financial services.
The number of organizations making low carbon commitments is increasing exponentially and we are observing greater investor scrutiny on ESG data. In turn, stakeholders are increasingly focused on validating their decarbonization disclosures and commitments.
Given the market momentum we were anticipating that many respondents would have made or are actively considering making a decarbonization pledge, but even so we were surprised by the survey finding that a total of 84% of the survey respondents have made, or are actively considering making, a decarbonization pledge.
For many, the road towards decarbonization is only beginning and ESG professionals are working hard to keep up. Despite widespread commitments and rising stakeholder demand for accurate, auditable ESG data, almost half of respondents feel they are just getting started on ESG reporting.
This low maturity is reflected in the fact that 60% report that they are still using spreadsheets to store and organize their data, which leads to enhanced risk and productivity loss – especially for complex organizations that report to multiple frameworks.
This insight is further supported by the finding that over 65% of survey respondents reported that they are still struggling with the perennial problem of data capture; half are finding reporting to multiple reporting frameworks challenging and 40% find it impossible to ensure traceability of data for the purposes of audit. The pressure to produce consistent finance-grade data for reporting weighs heavily on organizations in our study group.
It’s important that both reporting and performance improvement teams are working with the same data from the same system, so everyone is on the same page. We were delighted to see 75% of respondents indicated that responsibility for both reporting and emission performance improvement is within the remit of the same team, and that 65% expect their software to go beyond reporting.
This bodes very well for the next stage of the decarbonization journey for organizations, which is how to move beyond reporting to performance improvement.
In our experience, organizations typically use a combination of efficiency improvements, plant and equipment upgrades, renewable energy purchases or production, and carbon offsets to negate unavoidable emissions. This was confirmed by our survey results which indicated that 80% of respondents have plans to focus on operational energy efficiency, and over half plan to include renewables as a key initiative in their decarbonization journey in the short term.
Offsets were the least common tactic for decarbonization identified in our research, with only 27% of respondents citing carbon offsets as a key tactic in their decarbonization strategy. This is pleasing to see as offsets are difficult to track over time, as costs are unregulated and different standards in different countries make their auditability difficult.
In over a decade of supporting organizations on their decarbonization journey, we are constantly reminded that ESG data capture and management presents a challenge for many organizations. Having the right software in place will go a long way in the ESG reporting process.
It’s pleasing to see increasing commitments to decarbonization from organizations across all industries and no doubt as more adapt a single system of record for energy and sustainability data, their reporting and implementation will continue to strengthen.
Download the full report to learn more.
About the author:
A passionate technology entrepreneur, David Solsky is CEO and co-founder of Envizi, a market leader in data and analytics software for ESG and sustainability data. Before launching the company in 2008, David spent a decade in the IT industry, building several successful companies in Australia and New Zealand. Prior to this, David spent seven years in the Corporate Finance and Assurance divisions at PricewaterhouseCoopers, and this experience helps ensure Envizi’s solutions meet the rigorous information-integrity standards of the corporate sector. David plays a key role in the ongoing design and evolution of Envizi’s technology platform and oversees the development of the company’s global partner channel.
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