The single greatest operational challenge for organisations in advancing their sustainability agenda is data. Research indicates that 72% of organisations struggle with fragmented and unreliable sustainability-related data. Unlike traditional financial data, sustainability data is often less robust, more interpretive, less structured, and comes from very short value chains, making it difficult to apply standard financial controls like reconciliations.
To address this, organisations must treat sustainability data with the same discipline applied to financial reporting. Key practical steps include:
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Establishing clear ownership: Assign responsibility for each ESG metric (e.g., energy consumption, gender diversity) to specific functions like HR or operations, not just finance.
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Implementing robust controls: Define what internal controls are meant to achieve and apply traditional principles of completeness, existence, and accuracy. This involves all three lines of defence: the first line (business units) capturing data robustly, the second line (risk) understanding the results, and the third line (internal audit) possessing the skills to assess the risk.
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Ensuring leadership commitment: The board must approve ESG risk and metrics. A top-down approach is essential for cascading ownership and accountability across the organisation.
While a wide range of technology tools, including AI-powered platforms, can automate data collection and generate powerful reports, they cannot fix poor data integrity. The foundational step remains establishing a sound data strategy, governance over assumptions and proxies, and transparent disclosure of limitations.
Organisations are advised to start simply by integrating a few high-impact metrics into existing financial systems and dashboards, rather than immediately adopting complex, standalone solutions.