The Controller's Guide to Selecting ESG Data Management and Disclosure Technology

We have reached a critical milestone in ESG data management and reporting where expectations for verification and assurance of ESG data are nearing those of financial reporting. Therefore, many organisations are taking steps to align existing processes and responsibilities for ESG reporting with those of their financial reporting functions.

We've synthesised input from across financial roles responsible for ESG - Controllers, Internal Auditors, SEC Reporting, and CFOs to name a few - throughout the Nasdaq network to help you navigate a busy marketplace in order to identify your best long-term partner for ESG disclosures:

1. Place the burden of tracking and staying up to speed on reporting changes on a vendor that is purpose-built for ESG

Unlike financial reporting in the 10-K which has been standardised for years, the ESG and sustainability reporting landscape continues to evolve, and quickly.

• Ensure your partner is committed to the long-term support, maintenance and update of changing reporting frameworks and standards such as TCFD (Task Force on Climate-related Financial Disclosures), SASB (Sustainable Accounting Standards Board), and European Union reporting requirements. With dozens in frequent use today, staying ahead of the changes is no small feat and not practical for an internal ESG team.
• Verify that your partner will translate and provide guidance for impactful rating and ranking questionnaires including (but not limited to) MSCI, Sustainalytics and the Corporate Sustainability Assessment for potential inclusion in the Dow Jones Sustainability Indices.
• Identify a partner capable of addressing stakeholder requirements throughout your organisation. Robust ESG technology enhances both financial reporting and sustainability efforts simultaneously. Opting for a platform that caters comprehensively to stakeholder needs - featuring complete ESG data collection, management, auditing, and disclosure capabilities - will facilitate effective integration and utilisation across diverse teams involved in ESG reporting. Departments such as marketing, public affairs, and the Corporate Secretary, among others, will gain from a unified resource.

2. Prepare your disclosures for audit

Prepare for potential changes in regulatory requirements with technology capabilities today

• Establish role and workflow functions that enable internal edit, review, and approval, as well as the facilitation of both internal and external audit for access and review of data.
• Require activity logs showing date/time stamps and uploaded references to allow auditors to seamlessly track your audit trail.
• Ensure you gain from seamless annual data rollover, facilitating straightforward comparisons of changes and aligning with evolving reporting standards.

3. Automate as much ESG and sustainability data capture and flow as possible

Bring as many data gathering and certification processes into a centralised system as possible to reduce the risk of manual error and ensure complete, accurate data is collected in a timely manner.

• Assess if your partner is equipped to assist with the diverse channels through which you disseminate ESG data. While ESG reporting in regulatory documents like the 10-K is crucial, your company is also utilizing ESG insights in RFP submissions, promotional content, corporate communications, hiring processes, and surveys. Reduce the risk of inconsistent data by choosing a partner committed to a comprehensive ESG strategy.
• Because site-level data collection remains a key source for environmental ESG data, make sure your partner can pull source data such as energy usage from utility bills via API or bulk upload and translate it into reporting-ready emissions data.
• Select a solution that effectively supports a data warehouse, ensuring quality control, to enhance your team's efficiency. This solution should facilitate the linking of data requests, enabling your team to swiftly identify patterns in reports and maintain consistent data and messaging across your organisation. Empower your subject matter experts by reducing administrative burdens and repetitive tasks.

4. Secure a dedicated customer support team of ESG experts for set up and ongoing account support

• Confirm that you can call your provider directly for assistance on ESG-related topics such as recent changes to reporting requirements and visibility into pending reporting deadlines, and that industry knowledge is built into the platform. Request specifics on how often the team receives training and development on ESG trends and reporting frameworks.
• Ask that the team of ESG experts that leads your setup stay with you throughout your partnership. This will ensure that knowledge shared during the introductory phase of your implementation is carried through to your ongoing use of the platform, and that your vendor truly understands and supports your unique business needs.

To summarise, it is essential for companies to start applying the same standards of data integrity, audit, and assurance for ESG reporting as they do for external financial reporting. However, while the similarities between the future of ESG and financial reporting are significant, the differences are equally crucial. ESG is an evolving field that demands a long-term commitment from solution providers to invest in the necessary expertise and tools, enabling companies to maintain a competitive edge. Avoid succumbing to the current "land grab" amongst technology providers seeking a piece of the ESG pie, but instead focus on selecting the ideal partner to support your strategic ESG objectives.

Find the ideal partner for your ESG reporting needs by consulting our comprehensive Buyer's Guide to ESG Reporting Software->

Discover how Nasdaq can assist you by engaging with our ESG specialists->

What our clients are saying:

As a former auditor, I appreciate the detailed audit trail and audit-ready functionalities of Nasdaq Metrio™ (formerly OneReport). It is a highly effective tool for organisations in preparing their responses to ESG raters and rankers.

Emma Beard, Vice President Global ESG Reporting, Mondelez

We saved over 75 working hours creating our first TCFD disclosure using the index feature in Nasdaq Metrio. The platform allows us to pull together data and responses from our other disclosures, helping us leverage verified, accurate, and complete ESG data from our broader response repository for the TCFD. Nasdaq Metrio has helped Akamai improve our internal workflow and positioned us to seamlessly take on new and emerging reporting frameworks, resulting in a total of 150 total hours saved across one year.

Mike Mattera, Global Director of Corporate Sustainability and ESG Officer, Akamai