Financial Reporting & ESG

Research about the data problems of sustainability reporting

Research about the data problems of sustainability reporting

October 16, 2024
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In the spring of 2024, Intito commissioned a research about sustainability reporting data challenges. It addressed the most pressing issues in sustainability reporting, such as data handling, reporting and management.

The research was conducted by interviews with clients from Intito, along with a deepdive into existing research on the subject. All interviewees were in key positions within their companies, either as sustainability leaders or group-level financial controlling top roles.

Intito is committed to solving the data challenges of sustainability reporting. We have developed the Intito ESG Solution in collaboration with our customers to maintain a customer-centric focus. The timeline to act is tight as CSRD (Corporate Sustainability Reporting Directive) requires sustainability disclosures already for the reporting year 2025.

Business challenge

Sustainability disclosure requirements will affect most European organizations, starting in 2025. There is a lack of best-practices and processes on how to comply with the CSRD.

Most challenging issue is the Scope 3 emissions calculation

The study found that the most challenging issue is when data needs to be collected from multiple stakeholders outside the organization. This is required by the CSRD as companies are required to include Scope 3 emissions calculations. This leads to extensive research and data collection responsibilities that are not easy to manage, especially in multinational and large companies.

The consensus was that the best way to solve the Scope 3 data collection is to make data formats fit with the main key partners within the organizations value chain. Ideally all parties involved in a single value chain could agree on a singular format or a singular system to handle sustainability reporting.

An example of a complication found was different subsidiaries in different countries using different systems in controlling and monitoring business operations. This makes data collection difficult, especially with different formats.

Harmonizing these different formats was believed to be one of the most work-heavy factors that slows down sustainability reporting processes

Sustainability reporting data challenges are solved with integration and automatization

All interviewees agreed that a separate platform is needed beside Excel. And the consensus was that advanced integration is the key in this whole process. The goal of the integration is to minimize manual entry when constructing the actual sustainability metrics required for the sustainability report, as manual entry increases the risk of misreporting and compromises the integrity of the sustainability report.

“We realized a long time ago that we needed a separate platform besides these Excels. But after that, I think advanced integration is the key.”
-Quote of an interviewee in the study

The key takeaway from the deepdive into previous research on this topic was that accurate data is needed to drive sustainability action. The data needs to be easy to collect and control, and it must be reliable and relevant. To achieve this, organizations need to minimize manual inputting.

Intito ESG Solution eases the reporting burden

With the Intito ESG Solution, we want to ease the reporting burden of our customers. Intito ESG Solution is built on IBM Planning Analytics which makes data collection from multiple sources easy. This allows a tight integration between financial data and sustainability data and taping on to existing data sources. By leveraging the excellent calculation engine and integration capabilities, our customers have been able to tackle the issues of data collection and data accuracy highlighted in the study. IBM Planning Analytics is a trusted and praised solution for budgeting and forecasting among our customers.

The Intito ESG Solution offers a comprehensive platform to navigate these regulatory changes seamlessly. Our dedicated team will tailor it to your organizations reporting needs and make your ESG journey can start with accurate data.

The research was conducted in cooperation with LUT: Data perspective on sustainability reporting by means of multidimensional data and online analytical processing : a qualitative research about the data problems of sustainability reporting, Panula-Ontto, Jimi (2024)

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