Contact

The Definitive Guide to ESG Reporting [in OneStream]

This guide will cover all the important questions around ESG reporting. If you want to improve your ESG score and guarantee the success of ESG initiatives, this guide is for you.

Jump to a section:

ESG reporting explained and why it’s important

ESG reporting is now firmly set on the CFO agenda and compliance is moving from voluntary to mandatory. The International Sustainability Standards Board (ISSB), established at the environment conference COP 26 , is developing a global baseline of sustainability disclosures and these will become part of the IFRS framework. A tremendous promise to fulfill.

In general ESG Compliance is set around voluntary best practices and mandated requirements whereas Sustainability reports contain information about the environmental, social and governance (ESG) impacts of a specific company. 

ESG reporting is now firmly set on the CFO agenda and compliance is moving from voluntary to mandatory. The International Sustainability Standards Board (ISSB), established at the environment conference COP 26 , is developing a global baseline of sustainability disclosures and these will become part of the IFRS framework. A tremendous promise to fulfill.

In general ESG Compliance is set around voluntary best practices and mandated requirements whereas Sustainability reports contain information about the environmental, social and governance (ESG) impacts of a specific company. 

ESG Reporting enables organizations to be more open about the risks and opportunities it faces. It is becoming an important tool for stakeholders to determine whether a company is conducting responsible business practices in the long run.

ESG Reporting enables organizations to be more open about the risks and opportunities it faces. It is becoming an important tool for stakeholders to determine whether a company is conducting responsible business practices in the long run.

The ESG reporting framework consists of three pillars:

Environmental Pillar​

  1. Carbon emissions
  2. Product carbon footprint
  3. Financing environmental impact
  4. Climate change vulnerability
  1. Water stress
  2. Biodiversity & land use
  3. Raw material sourcing
  1. Toxic emissions & waste
  2. Packaging materials & waste
  3. Electronic waste
  1. Opportunities in clean tech
  2. Opportunities in green building
  3. Opportunities in renewable energy,

Social Pillar​

  1. Labor standards
  2. Health and safety
  3. Human capital development
  4. Supply chain labor standards
  1. Product safety and quality
  2. Chemical safety
  3. Privacy and data security
  4. Responsible investment
  5. Ensuring health and demographic risk

Controversial sourcing

  1. Access to communication
  2. Access to finance
  3. Access to healthcare
  4. Opportunities in nutrition and health

Governance

  1. Board diversity
  2. Pay
  3. Ownership
  4. Accounting
  1. Business ethics
  2. Anti competitive practices
  3. Corruption
  4. Financial system instability
  5. Tax transparency

How to obtain substantial investments with ESG reporting

Organizations with a good ESG Score typically have higher ratings in terms of reputation and carry less risk thus attracting more substantial investments. Mastering ESG reporting allows you to communicate ESG information that combined show the true value of your company to (external) stakeholders while also improving the overall management of ESG initiatives.

  • Attract investors
  • Streamline operations
  • Mitigate risk
  • Comply with regulations

How to improve the management of ESG initiatives

Why use ESG Reporting Software?

ESG reporting is challenging. From collecting data out of many sources to analysis and reporting to clear communication to stakeholders. There is typically a lot of manual work involved. Many organizations still manage ESG reporting via Excel or multiple tools but both of these approaches create a data collection, consolidation, and reporting process that’s separate from financial reporting.
 

Modern ESG tools will allow you to automate and streamline the ESG reporting process alongside your financial Metrics and process them as financial data. Aligning ESG reporting with the financial reporting, Consolidation and FP&A processes eliminates duplication, increases accuracy, ensures compliance and improves the overall success of ESG initiatives.

Download ESG Datasheet

The key areas an ESG reporting tool will support:

Financial data quality

Load and validate massive numbers of financial and non-financial data such as GHG emissions, energy usage with validations and drill-down/back capabilities to source data providing ultimate auditability. Connect to any ESG Data source as needed such as ERP, CRM, Human Resource systems, and Datawarehouse Solutions. 

Guided workflows

Workflow capabilities provide the ability to certify and sign off of data within a user defined environment, bringing governance and control without sacrificing the user experience. You also have the ability to manage monthly, quarterly and yearly tasks together and present alongside the finance function.

Financial Consolidation

A unified consolidation engine aggregates your ESG data submissions quickly and provides a company-wide result. You can use the existing entity hierarchy from your financial close or extend this further. The system will also allow you to directly use and validate data against audited results from your financial application when calculating KPI’s and metrics.

This eliminates the need for manual reconciliation between systems. Combining this with financial KPI’s provides you with the insight to analyze.

Reporting & Analytics

Bespoke dashboard visualizations and reporting capabilities provide a deep analysis of ESG data and present with a common approach to your financial reporting packs. Produce & distribute MS PowerPoint packs, MS word docs and PDF’s.

ESG Frequently Asked Questions

What is the Difference between ESG and CSR?

ESG criteria are used to assess whether a company is worth investing in whereas CSR is a business model applied by individual organizations. ESG scores your company's commitment to sustainability and related values.

ESG VS CSR

CSR ( Corporate Social Responsibility) initiatives drive higher ESG (environmental, Social and Governance) ratings.

What is the importance of ESG reporting?

Organizations with a good ESG Score typically have higher ratings in terms of reputation and carry less risk thus attracting more substantial investments. Mastering ESG reporting allows you to communicate the true value of your company to (external) stakeholders while also improving the overall management of ESG initiatives

What is the definition of ESG?

ESG is a theoretical approach that looks at how well a company is meeting social and environmental goals, in addition to its financial goals. It’s a framework for investors to determine if a company is worth investing in.

What are ESG reporting standards or frameworks?

Because of all the different frameworks and standards it’s challenging to understand which ones are relevant for your business.

There are three framework categories:

  1. Reporting Frameworks
  2. Guidance Frameworks
  3. Third Party frameworks

1. Reporting frameworks for Benchmarking and scoring

These frameworks help you benchmark your company against peers and competitors. Reporting frameworks take form of surveys and questionnaires to collect quantitative and/or qualitative data which feeds a Scorecard or other rating structure.

This rating can be used to communicate your organization’s dedication to ESG with all stakeholders.

2. Guidance frameworks for shaping ESG initiatives

Guidance frameworks can help you shape your ESG efforts and decide what kind of deliverables to use in order to share your results. A common deliverable is a corporate social responsibility (CSR) report, which can highlight your organization's current efforts and future plans and goals for improvement.

This frameworks helps you decide what to include in your reports. From adding the right context to choosing the correct audience and ensuring the most significant topics are addressed for your stakeholders.

3. An independent ESG overview with Third-party aggregated frameworks

Using publicly available data like external communication, website information and annual reports these frameworks paint an independent picture of your ESG initiatives.

Third party frameworks include:

GRESB

GRESB provides validated ESG performance data and peer benchmarks for investors and managers to improve business intelligence and industry engagement. GRESB, formerly the Global Real Estate Sustainability Benchmark. In the case of GRESB, real estate owners, asset managers, and developers are the intended responders.

CDP

CDP uses the scoring methodologies to incentivize companies to measure and manage environmental impacts through participation in CDP's climate change, forests, and water security questionnaires. Each of CDP's questionnaires has an individual scoring methodology.

UNPRI

The United Nations adopted the Principles for Responsible Investment to encourage investors to implement six sustainable investment principles. Each signatory must report their responsible investment activities each year using the UNPRI Reporting Framework.

GRI

The GRI reporting framework consists of universal standards and topic standards that organizations can use to prepare and report information that showcases significant sustainability impacts

SASB

The Sustainability Accounting Standards Board (SASB) is an ESG guidance framework that sets standards for the disclosure of financially material sustainability information by companies to their investors

TCFD

The TCFD has developed a framework to help public companies and other organizations disclose climate-related risks and opportunities.

SAM Corporate sustainability Assessment

The SAM Corporate Sustainability Assessment (CSA) annually evaluates the sustainability practices of more than 7,300 companies. Participants choose to fill out a questionnaire specific to their industry, and CSA assigns a sustainability score for each completed questionnaire. These scores help companies compare their sustainability performance to peer companies.

Is ESG reporting mandatory?

Corporate sustainability and climate change efforts are rapidly moving from voluntary to mandatory in many countries. Even the US Securities and Exchange Commission is heading to define crystalline disclosure guidelines for listed companies.

What are common ESG reporting challenges?

From a Framework perspective:

Some might argue that ESG is often well meaning but has flaws. From risking setting conflicting goals to distracting from goals to tackle climate change.

ESG cramps together a wide array of objectives potentially providing no coherent guide to investors.

ESG Scoring systems potentially have some inconsistencies leading to organizations being able to game the system. An example: Corporates can improve their ESG score by selling assets to a different owner who continues doing business as usual.

 

From an ESG software perspective

Advanced ESG reporting encompasses the whole process of goal setting, planning, monitoring and reporting, and analyzing results to track progress and make adjustments as needed to stay on track.

 

Many organizations manage ESG reporting via spreadsheets or point solutions. The problem with this is that it creates a separate process for data collection, consolidation, and reporting process separate from the financial reporting process. But ESG metrics should be reported alongside financial data and processed as such. Not aligning ESG with Financial Reporting increases the chances of duplication, a decline in accuracy, compliance issues and a drop in success rates of ESG initiatives.

ESG Report Example

How to increase your ESG rating with OneStream

ESG Reporting is complex and challenging because of the many moving pieces. From data collection, planning and consolidation and reporting to stakeholders. 

With a modern ESG tool you can streamline the whole process, improve your ESG score and manage initiatives with confidence with the ultimate goal of attracting investments and communicating the true value of your company.

ESG Reporting is complex and challenging because of the many moving pieces. From data collection, planning and consolidation and reporting to stakeholders.

With a modern ESG tool you can streamline the whole process, improve your ESG score and manage initiatives with confidence with the ultimate goal of attracting investments and communicating the true value of your company.

Deliver rapid insights to your stakeholders and ensure the success of ESG initiatives ​

OneStream Software provides an intelligent finance platform that will take your ESG solution far beyond simple reporting. It will streamline your ESG Reporting process whilst also unifying with the Office of Finance. By integrating ESG Reporting into your OneStream platform you gain control and have the ability to set your own compliance timeline for reporting requirements as they evolve globally. 

OneStream enables you to fully align ESG & Sustainability reporting with the monthly financial close, consolidation, internal management and external legal reporting processes. Integrate seamlessly with Microsoft Office, automating the creation of complex documents such as board packs, presentations and regulatory filings. 

AMCO Solutions can help you to leverage OneStream Software to comply with your ESG reporting requirements and bring improved control and ownership to the process to fulfill the ESG promise.

Download ESG DataSheet

The high level steps of mastering ESG reporting with OneStream

Integrate Data
Automate and streamline ESG data collection, validation, calculation and analysis to ensure consistency and accuracy in reporting. OneStream can connect to any source of data as well as load and validate large volumes of financial and non-financial data, such as conversion factors and ESG metrics, seamlessly. The extensive auditability of OneStream includes drill down functionality at any level of the metadata hierarchy bringing transparency to your ESG process.

Create Workflows
OneStream has extensive workflow capabilities providing the ability to certify and sign off of data within a user defined environment, bringing governance and control without sacrificing the user experience. You also have the ability to manage monthly, quarterly and yearly tasks together and present alongside the finance function.

Plan
Plan and forecast on ESG initiatives and track Actuals vs. Targets using OneStream’s multiple scenario capabilities. Provide variance analysis & aggregated commentary on forecasted conversion factors and perform what-if scenario modeling to understand the impact of changes. Analyze the metrics within these scenarios against budgeted & forecasted financial results to unify expectations. The right design to integrate with existing OneStream capabilities, like People and CAPEX Planning.

Consolidate
Leverage the OneStream’ consolidation engine to aggregate your ESG data submissions quickly and provide a company-wide result. You can use the existing entity hierarchy from your financial close or extend this further and OneStream will also allow you to directly use and validate data against audited results from your financial application when calculating KPI’s and metrics.
This eliminates the need for manual reconciliation between systems. Combining this with financial KPI’s provides you with the insight to analyze.

Report & Analyze
Bespoke dashboard visualizations and reporting capabilities provide a deep analysis of ESG data and present with a common approach to your financial reporting packs. Produce & distribute MS PowerPoint packs, MS word docs and PDF’s as well as utilizing the OneStream add-in to build ad-hoc reports within excel.This eliminates the need for manual reconciliation between systems. Combining this with financial KPI’s provides you with the insight to analyze.

Looking for a detailed roadmap to ESG compliance?
Schedule a meeting with our ESG specialist today.

SCHEDULE A FREE ROADMAP CONSULTATION

The benefits of using OneStream

  • ESG capabilities integrated with your financial consolidation, planning & budgeting
  • Set your own compliance timeline and follow up via extended monitoring capability
  • Leverage the consolidation engine and entity hierarchy from your financial close
  • Drillable data at all levels within the group structure
  • Bespoke and adjustable reports
  • Common metadata approach ensuring consistency with finance
  • No extra license needed for users that already have OneStream access
  • Extensive audit trail
  • Use of OneStream add-in to analyze data on the fly
  • Automate validation eliminating the need for manual reconciliation between systems
  • List Item
  • Multiple scenarios can be applied to enable comparison/variance analysis with emissions factors
  • Flexibility to make changes or additions to your requirements

Get a clear roadmap to mastering ESG with OneStream

SCHEDULE A FREE ROADMAP CONSULTATION

Stay up to date

Subscribe to get quarterly updates.

Send me updates

© 2023 AMCO Solutions | Privacy Statement

✕