Companies can collect environmental, social and governance (ESG) data from various sources and innovative technologies like artificial intelligence (AI), machine learning and data analytics are increasingly used to collect and analyze these data, according to sustainability curricula.
“The advantage of collecting such (ESG) data –it is not only for reporting to the government but also the company themselves have the idea of what they are doing right and what they are doing wrong. And this in turn also translates to where their costs can be reduced. So ESG is not only important from a social responsibility kind of point but it also actually makes business sense,” Deloitte India Executive Director Amrita Ganguly said in a webinar.
Ganguly presented the key content of the United Nations Industrial Development Organization’s (UNIDO) Learning and Knowledge Development Facility (LKDF) sustainability curricula during its official launch on May 14.
The curriculum materials support industrializing countries to better comply with sustainability regulations, implement sustainability initiatives, and drive overall sustainable development.
Ganguly said a systematic and planned ESG data collection helps to efficiently collect, measure, record and disclose the correct data.
“Robust ESG data empower decision-makers for identification of potential risks, seize opportunities, and enhance long-term value,” she said.
Ganguly said standards which companies bring out of these kinds of ESG data include the Global Reporting Initiative (GRI), standards developed by Sustainability Accounting Standards Board (SASB), framework developed by Task Force on Climate-related Financial Disclosures (TCFD), and reporting framework of Carbon Disclosure Project.
ESG data collection methods include internal sources; external sources; emerging technologies; and surveys, questionnaires and stakeholder engagement, she said.
“Companies collect ESG data from their own records and operations. This may involve analyzing financial reports, HR (human resources) records, and sustainability reports to assess their environmental impact, employee practices, and governance policies,” she added.
Ganguly said external data sources include publicly available information, such as government reports, regulatory filings, and data from third-party ESG research providers.
“Companies often distribute surveys or questionnaires to collect specific ESG data from their stakeholders, including customers, employees, suppliers and investors,” she said.
Ganguly also underscored the importance of tracking ESG data.
“Of course measuring performance, it is not only a fringe concern but it actually gives a very good insight into whether the operations of the company are in line or not. Benchmarking is another important aspect so the company can actually understand with respect to the industry peers, with respect to say energy performance, water performance, waste management,” she added.
Ganguly further said ESG data is also imperative in identifying trends, patterns and anomalies that might not be immediately obvious; ensuring compliance to avoid legal or financial penalties; and allowing organizations to track progress toward sustainability goals and objectives.
“ESG data can identify potential risks and vulnerabilities, allowing organizations to take proactive measures to mitigate them,” she added.
