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Best Practices in Managing Your ESG Data

By 
Keslio Team
6
 minute read  
|  
March 19, 2024
A laptop with data. It is surrounded by office supplies and plants illustrated in an 8-bit style.

A successful strategy relies on data-driven solutions and consistent monitoring, reporting, and improvement. Your strategy could be likened to a city that never stops growing. Beneath that mound of infrastructure developed to implement this overarching goal lies a network of support systems to keep everything alive. A successful strategy is reliant on the people who build and implement it, and an expansive set of data to back their performance up. However, for a strategy that encompasses almost everything, organizing data may not be the easiest thing to do. These critical numbers and pieces of information could come from different areas, both external and internal. In addition, once all data is gathered, managing it could be overwhelming.

Managing your ESG data is crucial to a successful sustainability strategy. Without it, a strategy will never be its best and strongest. It gives people a motive and a reason to believe that this is something worth improving. From materiality assessments to stakeholder engagement, from root cause analysis to continuous improvement, data drives movement and plays a great role in decision making. A business can’t just simply say there is work to be done in a specific function or department. A company can’t just state that their operations have produced less emissions than the previous year without having any supporting evidence.

Data builds confidence and trust. Properly managing ESG data can support an organization’s initiatives to drive change. With sustainability now a top priority in business strategies and an emerging requirement mandated for large corporations, a good ESG data collection and management system can ease reporting initiatives and back up claims that can attract customers and investors.

As we’ve said before, managing data could be overwhelming. ESG encompasses numerous material factors sourced from multiple key players. ESG data can be a lot, but we’ve got you covered. Here are some tips and practices that can make sustainability simple, allowing you to spend more time in bringing your strategy to life.

Best Practices

Have clear goals and objectives

No sustainability strategy can thrive without a blueprint of what you want to achieve. Clear goals and objectives set the foundation. Each goal will have its respective KPIs and targets. With these KPIs, your teams will be able to note the relevant information they would have to measure and track.

Set benchmarks

A good benchmark can help you strive for bigger and better targets. Take a look at other industry players, governing bodies, and benchmarking resources and see what goals they have  set, how much progress they have made, and what they have achieved so far. Having these benchmarks can help you set reasonable targets for your teams to achieve. These can also add more to the list of data you will be gathering, keeping you at the same pace as other key players in your sector.

Standardize and be consistent

With all the data you will be collecting, a set system will help streamline the process and keep data gathering a practice embedded in your business. Turn ESG data management into a core aspect of your operations by establishing policies or manuals to help facilitate the process. Consistency keeps sustainability in mind and also ensures warm connections with stakeholders and sources of information. Furthermore, standardization and consistency doesn’t just apply to the practice. It also includes being consistent with the data you’re collecting and aligned with global standards and frameworks. Adopting a sustainability reporting framework will make it easier for you to know what data is relevant for your business. Doing this helps you respond to global changes and also paves the way for sustainability reporting.

Connect and collaborate

Your stakeholders hold the information you need. One person or one team cannot do all of this on their own. Sustainability is a collaborative effort that requires the support across multiple teams and external stakeholders. ESG data management is a web that connects. Keep your stakeholders informed about your ESG data management initiatives and get them to collaborate with you to make data collection and visualization easier. It’s a good practice to engage with stakeholders and teams to understand the data they sent you and to see it in a different perspective as well.

Have a dashboard

Not everybody can easily understand all the rows and columns filled out in a spreadsheet. Data isn’t really helpful if it isn’t processed right. Visualizing your data and transforming it into readable charts, graphs, and tables can help better illustrate your sustainability performance. But readability and comprehension doesn’t have to end in making the appropriate graphs. ESG data management is a web that connects not just your key players, but your data altogether as sustainability, in itself, consists of interconnected elements. A dashboard that encompasses your data can help business leaders and stakeholders have a firm grasp of your sustainability narrative as a whole. In addition, it also reduces the need to scour different files and platforms for critical pieces of information.

Make the most out of technology

Technology is your secret weapon in simplifying ESG data management. When working with data, you don’t have to start from scratch. There are numerous platforms and software programs that have been developed to cater specifically for ESG data, from supply chain transparency to carbon accounting. Using technology will not just help you store and track your data, it will also automate processes and provide you with insights, system-made reports, and spaces where you can collaborate with key stakeholders and teams. A good ESG data management system can make a difference in your endeavors.

Note your references

Make sure you can trace your data back to its source. This means keeping track of who worked with the data and how they processed it. It’s good practice to be able to break down your final data into its parts. Record how you computed your data as it will help future teams and regulators better understand your results and possible estimations and assumptions made during the processing stage.

Get assurance

Effective data should be reliable. Internal and third party auditors will help ensure that your numbers are accurate and trustworthy. Auditing and verification will strengthen your claims and minimize the risk of greenwashing. In addition, this will help prepare teams for future sustainability reporting requirements which are starting to include the need to audit. ESG data should be trustworthy in order to make a true impact to both the business and overall sustainable development.

Be open to feedback

Your ESG data management system will have its ups and downs. Conduct regular check-ins with teams and stakeholders working closely with your data and consider their frustrations and experiences when developing improvements. There may be a need to work on the data collection process, on the visualization and presentation of information, and the overall system. Being open to feedback is a proactive practice that benefits everyone involved in your path towards sustainability.

Outlook

A good ESG data management is a strong foundation for a successful sustainability strategy. It fuels a drive for change and provides a new perspective on day-to-day operations. While developing a system and establishing standards and practices that will cement data management into your business may be time-consuming and laborious, the journey will yield positive results that ensure a stable future for the organization. Data is a powerful tool to build great structures and connect people for sustainability. A good ESG management system should be able to wield and care for these valuable pieces of information crucial to building a sustainable business.

At Keslio, we are deeply passionate about sustainability, equipping us with the expertise and extensive network needed to guide clients through their sustainability journey effectively and efficiently. Our expertise is particularly valuable for companies looking to embed sustainability practices into their businesses and investors looking to integrate ESG and impact into investment portfolios. To learn more about how Keslio can assist your organization on its sustainability journey, please don't hesitate to get in touch with us.

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