鲍迟颈濒颈迟颈别蝉听businesses around听the world 补谤别听facing听unprecedented pressures that听补谤别听蹿辞谤肠颈苍驳听conventional business听补辫辫谤辞补肠丑别蝉听to evolve.听听
As concerns around climate change and water scarcity continue to grow,听sustainability听across a wide range of dimensions is听being brought to the forefront of the way听utilities听operate.听Many of these dimensions are captured in the听measures of environmental, social and governance (ESG),听which collectively establish a听鈥渟ustainability鈥�听framework for assessing a company鈥檚听performance听in everything听from greenhouse gas emissions to employee health and safety.听
ESG reporting is transforming from being a听鈥榥ice-to-have鈥� to a听fundamental business听need. Utilities 补谤别听doubling-down听on efforts to establish a comprehensive reporting methodology that听takes into account听the expectations of听a听number of听stakeholders, including financial investors, regulators,听customers and听employees.听
Meeting the ESG reporting听and performance management听challenge听
The听increased focus on听sustainability performance 鈥� as represented by ESG听鈥撎�and the听associated听demand for high quality data, has grown faster than companies鈥� ability听to provide听it in a robust, automated, auditable way.听Now, as customers, investors and regulators seek more transparency,听current ESG reporting capabilities need to be assessed听against their capability to deliver听evolved听requirements.听For the most part, they fall short.听
Reporting of operational performance, including ESG, tends to be reliant on听manual processes听and, as a result, reported听data听is often听incomplete and not听standardised.听ESG performance, or the impact on ESG performance, can鈥檛 be integrated into investment decisions as it is not linked to financial data.听听This makes it challenging for the Board to steer the business as ESG data is not generally as available or trusted as financial data for investment decisions.听
The lack of solutions that enable real time听insight into ESG听performance听has in the past prevented utilities from experiencing the full benefits of better听sustainability听reporting听and performance management.听But now,听with ESG becoming a boardroom issue, practical steps are being taken to update how sustainability reporting is carried out,听based on an enterprise-grade platform which provides trusted data to stakeholders inside and outside听businesses.听
Benefits of improved ESG reporting听
If utilities can听transform how they report on ESG issues, the benefits they receive听will听extend to diverse areas of their operations. For example, credit鈥痳ating agency听听has found that ESG considerations are now a factor that lenders take into consideration when offering loan pricing.听听听
Linking loans and other forms of finance to听corporate sustainability performance听(and carbon emissions in particular)听is听one recent innovation听鈥�听but听it will not be the last method investors use that requires advanced ESG data.听This means that utilities听need to ensure the platforms they use for ESG reporting听are able to听support听a robust due diligence process that finance providers will undertake when testing achievement听against听contracted听ESG targets.听
Beyond this,听ESG performance听will听also provide competitive advantages and unlock value creation. For example, through zero carbon听energy听or water听provision,听increased customer loyalty and differentiated pricing.听听
These kinds of听developments听are part of the future for听the entire utilities industry. And听they听make new听ESG听technology decisions paramount for businesses that are serious about investment and prosperity, as well as sustainability.听
Corporate Sustainability Reporting and Performance Management by SAP, allows you to understand and manage your environmental impact and report against a range of different ESG standards. To find out more about this, and how SAP鈥�s capability can help, read our new or check out our .听
