CFOs Navigate ESG Reporting Challenges
The benefit of curbing emissions goes beyond just satisfying regulatory requirements -- it’s a license to do business for years to come.
At a Glance
- Identifying Stakeholders
- Comprehensive View of Carbon Impact
- Effective Carbon Accounting Systems
With environmental, social, and governance (ESG) regulation taking on greater importance in the business world, and the mandatory reporting that comes with it, chief financial officers now find themselves tasked with navigating the complex terrain of reporting requirements.
In Optera’s recent ESG Trends report, three-quarters of finance leaders reported “compliance with regulations and verification” as one of the most pressing problems to solve this year.
To start, CFOs must first identify stakeholder priorities through a materiality assessment, a process helping organizations identify and prioritize ESG issues most relevant to their business operations and stakeholders. Then, they must invest in the right value enablers by aligning with the strategic ambition for sustainability and ESG reporting.
Ty Colman, chief revenue officer and co-founder of Optera, says data is the key to a comprehensive and agile sustainability strategy. “CFOs cannot establish credible goals -- or track progress year after year -- without understanding how their current emissions map to specific business facilities, programs, suppliers or products,” he says.
When these numbers are sufficiently granular and built from primary data (versus estimates), organizational leaders can identify the biggest reduction opportunities and best practices to comply with regulations.
Colman explains granularity and primary data are key to emissions reduction, but this need not lead to analysis paralysis. “Understanding where the biggest impacts are can inform the prioritization of your data collection,” he says.
Ultimately, maintaining a comprehensive view of carbon impact empowers companies to continuously monitor progress and adjust practices as new regulations emerge.