Build a Platform for Managing, Reporting on ESG

While the pace and effects of social and environmental disruption accelerate, organizations can build capacity to drive ESG performance and resilience.

Growing emphasis in the marketplace on environmental, social, and governance (ESG) issues is prompting many organizations to consider how ready they are to meet increasing expectations for disclosure and action. As organizations identify ESG issues that are relevant to them and their stakeholders, they may identify opportunities to manage ESG information and drive strategy using technology to help standardize, streamline, and simplify the process.

Three critical trends are converging to give organizations cause to consider how they can prepare to meet escalating expectations from stakeholders and regulators, says Dina Trainor, a managing director with Deloitte Risk & Financial Advisory, Deloitte & Touche LLP, during a webcast on the topic. “Investors are accelerating action and requesting more transparency on the financial impacts of climate change and other ESG issues,” she says. “In addition, regulators such as the SEC are considering their respective roles in developing new requirements or prompting new disclosures regarding ESG disclosures, and standard-setters are aligning frameworks for disclosing ESG information.”

For many organizations, ESG-related information they may already disclose voluntarily or may be required to disclose in the future is contained across multiple systems and managed by multiple individuals, says Mark Mellen, the director of ESG enablement for technology firm Workiva Inc. (NYSE:WK). Often, such use of disparate systems can lead to challenges in sourcing, collecting, validating, analyzing, and reporting ESG information, he says.

In addition to data management challenges, organizations may also consider the internal controls that exist with respect to ESG-related data, says Julie Velayo, a principal with Deloitte Risk & Financial Advisory, Deloitte & Touche LLP. “In many organizations, information related to ESG matters is not subject to the types of controls that are common under Sarbanes-Oxley for financial reporting,” she says. “As regulators move toward new disclosure requirements, which may also be subject to assurance requirements, organizations can evaluate their systems and processes for managing ESG-related information through a risk-and-control lens.”

Learn about the Workiva Solution for ESG Reporting.

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