ESG Mastermind: How to effectively manage data collection for ESG reporting

As part of the Bold Future 2024 conference held on 12 November at the Prague Congress Centre, panellists at the specialised mastermind meeting focused on one of the biggest challenges of ESG reporting: capturing and processing relevant data across the value chain. There were perspectives from ESG specialists, the banking sector and companies that are already in the process of collecting data.

Specific strategies were discussed on how to gather information from suppliers, clients and other external parties, how to work effectively with estimates and how to ensure the reliability of data for reporting in line with current requirements.

Data as alpha and omega not only for ESG reporting

Companies and the financial sector are increasingly focused on capturing data from supply chains to better understand their impacts and comply with new regulations. While companies face challenges such as tracking the origin of materials or carbon footprint emissions, banks are using ESG data to assess risk, analyse investments and support sustainable financing.

The key is to strike a balance between detailed chain mapping and practical use of the data - from describing the business model to assessing environmental and social impacts. This trend reflects the growing pressure for transparency and accountability in business.

"We're looking at things that have been here before. There were impacts, investments had impacts, companies had impacts within their operations and supply chain, but suddenly we are starting to talk about what is happening. We are starting to take an interest, to ask questions, which is also an effect of regulation and I think now is the time when we can say - yes, the change is happening and we are hearing it here from practice," Marie Machálková, consultant at Frank Bold Advisory, summarised the topic.

‍Will AI and technology simplify data collection for companies?

Companies and banks are looking for effective tools for data collection and evaluation, so there was also a discussion about what is currently available. Some of the platforms being used include Ecovadis or blockchain technology for transparent tracking of the origin of raw materials. In addition, banks have harmonised the basic requirements in the ESG questionnaire under the guidance of the Czech Banking Association.

"The questionnaire has about 50 questions across ESG areas. We have tried to agree with others on the intersection that all banks are asking about. However, some topics may fall outside that intersection and over the time the questionnaire has been developed, the area of requirements has continued to evolve across banks. This means that I can't promise that you will fill out a bank questionnaire and no one will ask you anything else," said Eva Chvalkovská, Customer Journey Specialist at Komerční banka.

In the case of IT tools, the focus is on ensuring that these tools serve primarily as support for process improvement and strategic decision-making. "IT software cannot be relied upon to solve everything. You need to think about it and say what do I want and use the tool as a good servant," explained Dan Heuer, CEO of Impact Metrics.

The role of suppliers in data collection

The extent to which suppliers are involved in reporting depends on their importance to the company. "In our company, we have determined the percentage of suppliers according to their share in our turnover and profit, so that we define the ones we won't ask about because their share in the chain is not so high that their data is crucial for us," said Iva Prošková, sustainability manager at Severotisk and Svoboda Press.

The discussion also raised the question of how data from suppliers is verified in practice and how important trust is in this respect. The panellists agreed that supplier data verification is a combination of trust and control. Not only do long-standing relationships and experience play a role, but also the use of tools such as audits, questionnaires and analysis to ensure the reliability of data.

Sustainable supply chains: the key to the future of business

Ensuring the sustainability and resilience of supply chains is a complex challenge that companies must actively address. An effective combination of dialogue, methodological support and tools such as audits or sector initiatives that can inspire positive change are key in this regard.

Large companies are often implementing innovative approaches such as chain learning to support the long-term adaptability of their partners to future challenges, including climate risks and the transition to a circular economy.

‍"In addition to sustainability, we also need to look at the resilience of supply chains, because new risks are coming into play, whether it was a pandemic, for example, or whether it is climate risks that will need to be addressed. These are all challenges that companies will have to face in the future in terms of supply chain management," concluded Marie Machálková, consultant at Frank Bold Advisory.

‍Want to know more? Watch the video of the ESG workshop and mastermind

If you're interested in the topic and want to learn more about effective ESG data collection and reporting management in general in your company, buy the video of the ESG workshop and mastermind from the Bold Future conference.