Don’t Trust Your ESG Reporting to Just Anyone

Is ESG the new gold rush? Some tech giants and startups seem to think so. With each passing day, more and more software providers throw their hat into the burgeoning ESG ring, hoping to cash in. While it’s perfectly reasonable for these companies to seek out profitable endeavors, most of those companies have limited real-world experience with ESG reporting and software. You may want to think twice about trusting your critical ESG reporting to someone looking to ride the wave toward a quick buck. 

Locus has been developing and supporting ESG solutions for over two decades, before the ESG acronym ever made its way into headlines and boardrooms. In addition to the years of experience, Locus places great emphasis on domain knowledge, hiring experts in environmental science, engineering, sustainability, and mathematics to name a few. Our solutions are built and supported by these qualified experts, opposed to developers who are frantically cobbling together a solution that they can rush to market. 

It takes years to develop a foolproof system for handling massive quantities of complex data. In a recent piece written by President of Locus, Wes Hawthorne, he delves into the importance of having accurate, audit-ready ESG reporting. Data quality and reporting accuracy have been pillars of Locus’ success since our founding in 1997. 

Do more for your ESG program than applying a cookie-cutter tool meant to meet the bare-minimum needs of the many or an application that is new and untested, and unfit for your requirements. Our robust solutions help you manage impact, create reports with ease, and meet your ESG goals effectively.  

Contact Us to Get Started Today

    Name

    Company Email

    Phone

    Tell us about your company's needs

    Locus is committed to preserving your privacy.

    Carbon Offsets Have a Huge New Problem—Wildfires

    As if the world of calculating forest and natural assets to be used as carbon offsets for big businesses isn’t complicated enough, now there’s a huge new, unexpected issue. Wildfires are threatening the underlying nature itself.

    Oregon Wildfire

    A pyrocumulus cloud from Oregon’s Bootleg Fire can be seen for miles as it burns in the Freemont-Winema National Forest. As of Thursday night, the fire had burned more than 400,000 acres, including forest that had been preserved to compensate for greenhouse gas emissions elsewhere. Photo: National Interagency Fire Center.

    The wildfires in the American West this past summer, including one big fire in Southern Oregon, the Bootleg Fire, torched a large percentage of land set aside for carbon offsets. Another fire in Washington State threatened an Indian reservation carbon offset project. Companies who produce greenhouse gases pay nature and forest reserves to maintain and build themselves out to help trees pull carbon from the atmosphere. The offset allows the companies to claim they are carbon neutral. The more they pollute the more they pay. A growing financial market for offsets in Europe, the UK and now China is based on the premise these assets can be correctly measured and managed.

    That premise routinely comes under fire, as one forest is different from another, some trees in the same forest suck carbon at a different rate then others and, of course, there’s no way to tell how a forest used as an offset today will look 100 years from now. Now the natural land is coming under fire literally. In order to counteract CO₂’s climate-warming properties, a carbon offset project needs to promise to sequester carbon permanently. That’s because CO₂ can linger in the atmosphere for up to 1,000 years. If the carbon that is avoided or removed ends up getting released, then the program is flawed. The impact of the fires is already generating calls from advocates who argue carbon output needs to be reduced at its source, not offset with money and accounting gimmicks. Those are legitimate arguments but as we are nowhere near approaching a global scenario like that, offsets are our best shot to make polluting more expensive and ultimately reduce it.

    The problem is that the offset market is developing so fast that all the parties in it — buyers, sellers, brokers — are profiting, and so are thinking of new ways to grow it. Already, ideas about securitization of carbon offset assets, where they would be packaged into tradable derivatives, like mortgages or interest rate products, are catching on.

    This feeds into more participants in the carbon market, and as a result, higher prices, and then more participants on that. On the European Trading System for carbon prices, the value of futures contracts for UK carbon topped $100 (£ 72.4 pounds) in late September amid the country’s petrol delivery crisis. But none of this compares to what could happen if global leaders can advance the idea of an international carbon price and emissions trading mechanism at the United Nations’ COP26 global climate summit in Glasgow in November.

    The carbon market, one way or another, is certain to develop in coming years, and with it, the potential for abuses. Those can be fought by new regulations and better policing of markets. But at present, there is nothing to stop the natural threat of fires or other disasters on the underlying offset assets. In the investing world, we call these developments Black Swans. Something completely unexpected that comes along and upends markets. Kind of like China’s sudden attack on its tech industry this past summer, and its impact on Chinese stocks worldwide. It is another sad and ironic tragedy of climate change that global warming itself is destroying the very tools we have to fight it.

    [sc_image width=”150″ height=”150″ src=”24014″ style=”11″ position=”centered” disable_lightbox=”1″ alt=”David Callaway, Callaway Climate Insights”]

    About the Author—David Callaway, Callaway Climate Insights

    David Callaway is founder and Editor-in-Chief of Callaway Climate Insights. He is former president of the World Editors Forum and editor of USA Today.

    [sc_button link=”https://www.locustec.com/applications/sustainability/greenhouse-gas/” text=”More on GHG” link_target=”_self” centered=”1″]

    6 Ways To Get Data Into Your EHS System

    Locus provides multiple methods to populate EHS, ESG, or any environmental data, including the following:

    6 Ways to Input Data

     

    Integrations

    Locus provides a full suite of REST API’s, and SDK that can be used to populate data from external data sources. Typical uses include utility data, CEMS, meter data and IoT data.

     

    Surveys

    Locus Survey tool enables you to issue survey questionnaires to people outside your organization, and enables them to securely and seamlessly respond directly into the survey form. Typical uses include supplier surveys, audits and customer questionnaires.

     

    Mobile

    User input forms can be optimized for input on a phone or tablet, which allows quick uploads of photos and also geotags your data so you can ensure it was collected at the right location.

     

    Excel and Text Files

    Locus provides a full suite of Excel upload tools that allow you to import data directly from Excel or CSV files. This option also allows you to work offline and re-sync your data later. Typical uses include laboratory data, periodic monitoring data and data migrations.

     

    Manual Data

    Like any system, Locus provides tools for users to directly enter data into the system. These include Locus sophisticated data validation tools which employs machine learning techniques to identify data entries which may be invalid, with visual indications of the expect range or ranges.

     

    Email

    Locus can be configured to directly read email input (as text) and place it into the system. Typical uses include instances where external users initiate a conversation, which then may be responded to from within the system, such as an inquiry, issue, or an incident report.

    Contact us to learn more

    Send us your contact information and a Locus representative will be in touch to discuss your organization’s environmental data management needs and provide an estimate, or set up a free demo of our enterprise environmental software solutions.

      Name

      Company Email

      Phone

      Tell us about your company's needs

      Locus is committed to preserving your privacy.

      5 Keys to Navigating ESG

      With sustainability practitioners strained to deploy limited resources internally to navigate the myriad of standards and frameworks to meet the growing appetite for environmental, social, and governance (ESG) information, we continue to ask, “Isn’t there an easier way to do this?” Navigating ESG Anyone who has worked to align standards and frameworks, corral internal champions around disclosure requirements, and marry quantitative performance data with narratives on management approach, knows that this is no easy feat.

      The uphill battle to integrate data and other systems is often complicated by trying to pull others along in the organization—regardless of where their hearts lie.

      So how is it that we can focus in on what’s relevant and minimize the reporting burden on others?

      At the risk of seeming to oversimplify the process, I’ll attempt to breakdown some of the concepts mentioned here as a means for peering through the gray. The following five points have been central to my years of guiding organizations through this process. Navigating ESG

      1: Navigating the myriad of standards and frameworks:

      Not only are there the long-time warriors (the Global Reporting Initiative, CDP, and the Sustainability Accounting Standards Board now merged with the International Integrated Reporting Counsel labeled as the Value Reporting Foundation), there are also larger north star initiatives, like the United Nation’s Global Compact or Sustainable Development Goals, and even those that are industry specific, like the Global Real Estate Sustainability Benchmark. There are also the investor-driven ratings and rankings, supply chain initiatives, and mandates disclosure requirements that organizations must contend with. Not everyone is blessed with sustainability departments powered by specialists of all types. In fact, most are managed by 1-3 individuals who often juggle multiple roles until they can prove the importance of an integrated strategy and leverage additional support. In the end, standards alignment comes down to one person dropping all disclosure requirements into an excel spreadsheet to make sense of all that is needed. There is no harm in this. It is a recommended first step in trying to better understand the nuances between all that is asked and whether it is possible to pull data to meet various requirements. The goal eventually, of course, is to automate reporting against all applicable requirements. Usually companies start by developing a comprehensive list of all that they can disclose, either initially or in the future.  The key is not to exclude areas that the company is unable to immediately disclose on, but to press the “pause” button and keep those items in the horizon as areas that should be revisited in the future. Instead, stating where one is in the journey to retrieve information and manage inherent risks, while providing data for what is possible, is recommended. In that, clear “omissions” or “exclusions to the boundary” should be noted.

      ESG | Qualitative vs Quantitative Data

      2: Determining the qualitative vs. quantitative:

      Be it labor standards, human rights, training and education, resource consumption or greenhouse gases, there are both qualitative and quantitative features to grasp and disclose an organizations’ impacts. Granularity is based on what the organization is trying to achieve by pursuing efforts in a certain area. Will the level of detail provide a sharper view of potential risks? Will the data enable decision-making? Will it demonstrate the level of transparency the organization is willing to provide to match disclosure among its peer group? Will it result in greater recognition or even, leadership status? By asking these questions, organizations can determine their priorities and narrow in on data tracking mechanisms to pull, house, and analyze detail. Keep in mind, however, taking inventory always presents surprises. Try not to go down a rabbit hole searching for data that doesn’t exist or isn’t relevant considering the larger footprint. Report on what is available and explain what is being accounted for, what is missing, and why. Navigating ESG

      3: Pull others along:

      Frameworks, data, and the endless requests for disclosure are enough to make anyone question their sanity—let alone the ongoing education that is needed to bring others along the path towards greater sustainability. Up until about five years ago, the role of the sustainability champion was often a lone wolf in the organization who felt committed to the charge. Boards were not involved, and it was because few companies saw sustainability as a strategic imperative. Today, it’s no longer effective to go at this alone. Markets have begun to regulate this space: the fear of shareholder resolutions, and the inability to access capital due to a lack of demonstrated ESG commitments, risk management, and performance disclosure has catapulted the need to activate players across functions. Regardless of standard, framework, or reporting platform, governance is critical to ensuring that sustainability sticks. It’s not enough to simply describe the organizational and leadership structure, but to describe how and where sustainability or ESG risk management sits within and what the role of the Board is. The sustainability coordinator, or Chief Sustainability Officer’s structure the group to facilitate action. Constant education and hand holding is necessary to inform the working group on the rapidly changing landscape and what is needed to maintain a license to operate from the stakeholder perspective. ESG Report

      4: Minimize the reporting burden:

      If it’s not clear by this point, all that matters when it comes to reporting is 1) performance data, 2) an explanation of management approach, and 3) a description of your processes undertaken to identify material matters and manage risks. Stories and imagery provide color but not an overview of what the organization is doing to manage impacts. Begin by structuring your website to highlight data. Embedd data from  GRI, the SDGs, and/or SASB indexes as companies such as Ball Corporation, BlackRock, and Coca-Cola. All have focused more efforts on tangible reduction and reuse, rather than creating beautiful communication pieces. This allows them to focus time and resources on doing the work that matters. ESG Data Collection

      5: Data collection:

      As the saying goes, “what doesn’t get measured doesn’t get managed.” Pulling data from the ESG pillars and across functions often means that the data collection process tends to take shape like a patch work quilt. Utilizing an integrated, configurable system that can extract and consolidate data into a single source of truth allows companies to focus on results, rather than begging for data from sources internal and external to their organization. Where possible, automate the data collection process, and provide decision-making analytics that can be transferred to various disclosure platforms to streamline the process and further minimize the reporting burden.

      Hopefully, these points will help reassure you that you’re on the right path. The reality is, there is no easy way. Many of the front movers know this all too well. Their approach has taken years to solidify. In addition to the 5 points listed above, try to remember that it is important to just get started. Improvements can be made over time and lessons aren’t typically learned through perfection.

      [sc_image width=”150″ height=”150″ src=”23979″ style=”11″ position=”centered” disable_lightbox=”1″ alt=”Nancy Mancilla, ISOS Group”]

      About the Author—Nancy Mancilla, ISOS Group

      Ms. Mancilla is the CEO and Co-Founder of ISOS Group, a full services sustainability consultancy firm also recognized for its leadership as a GRI and CDP Certified Training Partner in the U.S. Since establishing the company, Nancy has orchestrated 300+ Certified Trainings, co-taught MBA programs, regularly serves as a conference guest speaker and thought leader on the non-financial reporting process. In addition to educational services, ISOS Group provides organizations of all types with sustainability assessments, reporting guidance and external assurance.

      [sc_button link=”https://www.locustec.com/applications/esg-reporting/” text=”More on ESG” link_target=”_self” centered=”1″]

      Getting Started With ESG Is Less Daunting Than You Think

      One of the most frequent questions we get asked when it comes to ESG is, “Where do I begin?”. For many companies, the process of getting started with a new ESG program is the most difficult step. With nearly 1,700 frequently evolving ESG reporting protocols available, it can be daunting just to determine where to begin. This uncertainty associated with ESG reporting can unfortunately paralyze any progress for several organizations. The good news is that ESG doesn’t have to be an ‘all or nothing’ effort. In fact, getting started is a simple and straightforward process.

      Get started with ESG

      Regardless of what ESG reporting program you choose (or eventually choose), there are many common elements that can form the basis of your organization’s ESG program. Although social and governance KPIs have been undergoing rapid evolution recently, environmental KPIs have been comparatively stable. Environmental KPIs tend to be quantitative with established calculation methodologies, whereas the definitions and determinations as to what is important regarding societal and governance factors and how to measure them are still being evaluated globally. Considering this, many companies elect to start their ESG reporting program using monitoring and collecting environmental data.

      Additionally, almost all reporting programs include the concept of a baseline, or a time period against which future ESG metrics are compared. Developing the baseline requires a good understanding of your organization’s current ESG performance, which of course requires a good set of data. Universal data that is required for any ESG reporting program includes data on greenhouse gas, water quality and consumption, waste, and energy consumption. The bedrock of an ESG program starts with the collection, management, and reporting of these data. This information can also help to inform further decisions for your ESG program, including which framework is most appropriate for your organization.

      Locus Sustainability Metrics

      As part of this effort, you should make sure you are collecting and calculating your ESG metrics with software that supports the required complexity of environmental data. Often the companies who suggest a turnkey solution to ESG reporting are not only lacking in social and governance data, but are woefully underprepared and unequipped to handle environmental data as well. With over 25 years of experience in creating software for environmental reporting, Locus Technologies is equipped to help organizations collect and report ESG data in a way that others aren’t.

      Contact Us to Get Started Today

        Name

        Company Email

        Phone

        Tell us about your company's needs

        Locus is committed to preserving your privacy.

        Combat Green Skepticism with Accurate ESG Data

        Greenwashing, or the presenting of misinformation to create a sustainable image, is common among organizations. While many consumers may not be aware with the term greenwashing, they are aware of how common it is. In fact, consumers are so aware of this trend that they’re overwhelmingly skeptical of all organizations presenting themselves as sustainable. Four out of every five consumers have expressed skepticism of organizations claiming to be sustainable. So, how does your company express your sincere desire to take steps that are sustainable for the environment? With accurate and transparent data.

        Avoid Green Skepticism and Greenwashing with Locus

        With 2/3 of consumers seeking out companies that emphasize sustainable practices, the temptation to greenwash is certainly enticing. Sometimes it comes in the form of making irrelevant claims, like saying a product is free of something that is banned (like CFCs). Other times it comes in the form of half-truths, like saying that a product is sustainably sourced, despite the manufacture of the product being unsustainable or harmful to the environment. Any way you look at it, the demand for sustainable products is so high, as is the temptation to greenwash. The truest, and least disputable way to combat greenwashing is by collecting and reporting your data accurately.

        Sustainability is now a broad umbrella term that encompasses not only environmental practices, but social and corporate governance as well, better known as ESG. This broadness reflects a change in consumer attitudes from generation to generation, perceiving more than environmental practices as important while holding environmental practices to the microscope. In fact, over 75% of Gen X consumers say that they have to trust a brand before purchasing from them, and over 85% of Millennial and Gen Z consumers say they same. This trust encompasses everything from the use of organic ingredients to company wellness practices, and is reinforced with buying practices. To do environmental, social, and corporate governance right, organizations have taken a data-first approach.

        Credible ESG Reporting with Locus

        With Locus Technologies, you can take concrete steps towards achievable ESG goals. By taking a fully-digital approach, your organization can make the transformation by maintaining full visibility of raw sustainability data, calculations, and other factors, and also keeping data easily accessible and traceable. Reports are fully traceable back to the source, and are indisputable, allowing for increased trust from consumers or anyone else who has a stake in this information. Given that 7/10 consumers are willing to pay a premium to sustainable-minded companies who are fully transparent with their efforts, this move can provide a significant return on investment in the short term.

        The benefits of data centralization also go beyond combatting greenwashing. A fully-digital and streamlined process will improve your ability to handle the data appropriately, and will ease any auditing and reporting responsibilities moving forward, making the entire process cheaper and faster.

        Avoid Green Skepticism and Greenwashing with Locus

        With brand loyalty and purchasing decisions being reliant on sustainable decisions, the move to accurate and transparent data management is key. By implementing Locus Technologies ESG software, your organization can employ cutting-edge solutions to combat greenwashing by promoting your sustainability goals and actions transparently and accurately.

        Request an online demo of our ESG solutions

          Name

          Company Email

          Phone

          Tell us about your company's needs

          Locus is committed to preserving your privacy.

          No-Code Application Development

          Locus delivers capabilities that enterprises need to achieve true digital transformation in a unified low-code or no-code automation platform. Locus provides out-of-the-box tools and services to automate business processes, integrate with external applications, and provide a rich user experience.

          No-Code EHS Application Development

          Locus offers low-code app building, rich multi-experience capabilities, business process orchestration, automated decision making, and easy integration with other databases. Locus makes it easy to modify existing seeded apps or build entirely new apps in a few clicks and provides easy ways to write business logic to solve challenging EHS or ESG problems. We let you blend “off the shelf” apps and unique requirements with exceptional ease.

          Who is a User-Developer?

          If you know how to layout slides, if you can draw a flow chart, build a spreadsheet using formulae, sorting, with tables and charts, then you are a User Developer. We empower domain experts to build applications within the Locus Platform using the platform’s drag and drop functionality.

          What is No-Code Development Platform Software?

          No-code development platforms provide drag-and-drop tools that enable end-users with proper access privileges to develop software quickly without coding. Locus Platform provides WYSIWYG editors and drag-and-drop components to rapidly assemble and design EHS, ESG, or any other application applications. Both developers and non-developers can use these tools to practice rapid application development with customized workflows and functionality. Locus Platform provides tools for enterprise-sized businesses that need to quickly design business processes and workflow applications at a large scale, such as ESG reporting or EHS compliance management. The software tools provide templates for workflow, element libraries, and interface customization to create fully functioning applications without any coding.

          With Locus, your organization can:

          • Drag-and-drop entities to assemble applications.
          • Allow non-developers and non-technical users to build applications.
          • Build ESG, EHS, or any other apps fast using visual tools that empower IT and business lines alike.
          • Leverage no-code integration to connect and act upon data across databases, cloud services, and legacy systems without data migration or use APIs to tie in data.
          • Deliver enterprise-grade security, scalability, and reliability to support mission-critical business apps.
          • Easily build complex workflows to suit your organizations needs.

          [sc_button link=”https://www.locustec.com/applications/ehs-compliance/custom-apps/” text=”More on Custom Apps” link_target=”_self” centered=”1″]

          Emerging Technology and the Environmental Industry

          Locus Founder and CEO, Neno Duplan recently sat down with Grant Ferrier of the Environmental Business International to discuss a myriad of topics relating to technology in the environmental industry such as Artificial Intelligence, Blockchain, Multi-tenancy, IoT, and much more.

          Read more

          Adapting to New ESG Roles and Responsibilities

          A growth in commitment from proactive organizations towards heightened ESG standards means that many professionals have seen their duties not only increase, but they have been made more diverse than before.

          Read more

          Preparing for Your ESG Audit

          Recently, Locus CEO Neno Duplan described the need for credible ESG Reporting, and the evolving corporate, financial, and political drivers leading to the proliferation of ESG reporting. Here, we look at some of the practical aspects of building and maintaining an ESG reporting program.  After leading audits for greenhouse gas emissions and other ESG metrics for the past ten years, I wanted to highlight the pitfalls that many organizations face when it comes to supporting their ESG reports, and provide some solutions to improve their auditability.

          Locus Engineer Laptop

          With the current wave of popularity for Environmental, Social, and Governance (ESG) reporting, many organizations are scrambling to assemble reports that cover these metrics.  While a spreadsheet can be readily put together with enterprise-level totals for emissions, resource consumption, community involvement and other metrics, most of those reports won’t stand up to a full audit process. And increasingly savvy investors and stakeholders aren’t necessarily willing to take these reports at face value.

          Whether you are getting started on a new ESG reporting program for your organization, or transforming an existing CSR program to cover ESG elements, it is critical to plan ahead for ensuring your final report is audit-ready. That means not only maintaining full visibility for the raw data, calculations, and various factors that went into the report, but also making that data easily accessible and traceable. Consider the case where a stakeholder is comparing two ESG reports where the overall metrics are similar. But one of the reports has a fully transparent data flow back to the source, and the other report can only be verified through a lengthy documentation request to a consultant. Although the final reports may be similar, the stakeholder gains more trust with less effort when the supporting data is readily available.

          Locus Sustainability Metrics

          There is quite a bit of uncertainty over how comprehensive ESG audits should be. Current audit protocols for ESG reporting vary widely. Organizations like the Center for Audit Quality have put forth guidance on how ESG reports could be audited. However, there are no strict requirements and little consensus on what should or should not be included in the audit of an ESG report. Established reporting frameworks like GRI, SASB, and TCFD have programs in place for assurance of those reports, which include a third-party audit for the accuracy and completeness of that data.  However, organizations have the choice of achieving either limited assurance or reasonable assurance, and they may choose to have only select metrics or disclosures audited, or they may opt to undergo a more thorough examination that covers the full report. That flexibility is likely to change, however, as stakeholders apply additional pressure for better quality and reliability in ESG reports.

          So how do you go about developing an ESG program that can meet current and potential future audit requirements?  Based on my auditing experience, here are a few key concepts to keep in mind:

          [sc_icon_with_text icon=”cloud” icon_shape=”circle” icon_color=”#ffffff” icon_background_color=”#52a6ea” icon_size=”big” level=”h3″]

          1. Centralize your data flow

          Centralize your data flow, with consistent data quality controls. A unified data collection program is key to streamlining the audit process and having greater confidence in your report. Historically, reporting for ESG has been the responsibility of multiple departments with little intercommunication. The result of that separation is widely different practices when it comes to assuring data quality. Integrations between systems can help and are sometimes the best option to bring together data from different sectors of the ESG report.  But ultimately, a consistent approach to the overall data collection and processing effort will result in a much smoother (and cheaper) audit.[/sc_icon_with_text]

          [sc_icon_with_text icon=”automation” icon_shape=”circle” icon_color=”#ffffff” icon_background_color=”#52a6ea” icon_size=”big” level=”h3″]

          2. Automate data collection

          Automate data collection wherever possible. Auditors know that manual data entry or transcription is typically one of the major weak points in any data collection program. We’re trained to focus in on those parts of the process with additional data sampling and review to find errors.  If you have any opportunities to collect data through automated tools or direct connections to reliable data sources, those tools are the quickest ways to shore up those potential weaknesses, and also have the benefit of substantially reducing your ESG data collection effort.[/sc_icon_with_text]

          [sc_icon_with_text icon=”documents” icon_shape=”circle” icon_color=”#ffffff” icon_background_color=”#52a6ea” icon_size=”big” level=”h3″]

          3. Maintain documentation

          Maintain documentation throughout the data collection process. During one audit years ago, I asked the reporter for their documentation on their electricity consumption, and they pointed to a scribbled sticky note on their wall. Of course, that didn’t quite suffice for audit purposes, and neither does an email from a co-worker, or any number of other data sources that reporters have tried to pass off as their documentation. For inputs that derive from sources outside your organization, like utility invoices or supplier surveys, data are considered more reliable if they are directly tied to a financial transaction between entities that do not share ownership. The general thought is that if the data quality was considered sufficient to exchange money based on the value, it can be considered reasonably accurate.  If that is not the case, ideally an attestation, or at least the source’s contact information, should be maintained for each data source. For data inputs derived from internal sources (e.g. meter readings), the documentation will need to include the data itself, as well as information on the devices used and their maintenance (e.g. calibration records).[/sc_icon_with_text]

          [sc_icon_with_text icon=”calculation-engine” icon_shape=”circle” icon_color=”#ffffff” icon_background_color=”#52a6ea” icon_size=”big” level=”h3″]

          4. Avoid black box calculators

          Given the many issues with spreadsheet data handling including lack of unification, security, and error proliferation and persistence, many organizations are correctly concluding that a dedicated software application provides numerous process improvements for ESG reporting. But unfortunately there are many software tools that take the input data and generate an ESG report with little or no visibility into how the input data were processed or calculated. And to an auditor, those part of the process are critical to achieving assurance for an ESG report. Sometimes the data processing steps can be viewed, but they’re buried within the configuration settings and require navigation by a system administrator to extract. In this situation, auditors can try to replicate the calculations from the raw data on their own, and attempt to yield the same results. This approach can work for many accounting metrics, which are largely standardized, and easily replicable from the input data.  However, other metrics like Scope 3 emission calculations can follow a number of different methodologies with different factors. Without knowing which methods and factors were used, the auditor is unlikely to yield the same results. Having a transparent calculation engine that can visualize the data flow and processing can make a huge difference when it comes to your audit.[/sc_icon_with_text]

          Assembling an ESG reporting program is a significant undertaking, and it may be a monumental effort to simply get the report done, especially if you’re just getting your program started. But to fully set yourself up for long-term success, be sure to assess the audit readiness of your ESG program. Even though ESG auditing is not yet fully codified, more formalized audit protocols are expected soon. Some simple considerations early in your program development will make sure you are prepared for whatever those audit requirements may include.

          [sc_image width=”150″ height=”150″ src=”16265″ style=”11″ position=”centered” disable_lightbox=”1″ alt=”Steve Paff”]

          About the Author—J. Wesley Hawthorne, President of Locus Technologies

          Mr. Hawthorne has been with Locus since 1999, working on development and implementation of services and solutions in the areas of environmental compliance, remediation, and sustainability. As President, he currently leads the overall product development and operations of the company. As a seasoned environmental and engineering executive, Hawthorne incorporates innovative analytical tools and methods to develop strategies for customers for portfolio analysis, project implementation, and management. His comprehensive knowledge of technical and environmental compliance best practices and laws enable him to create customized, cost-effective and customer-focused solutions for the specialized needs of each customer.

          Mr. Hawthorne holds an M.S. in Environmental Engineering from Stanford University and B.S. degrees in Geology and Geological Engineering from Purdue University. He is registered both as a Professional Engineer and Professional Geologist, and is also accredited as Lead Verifier for the Greenhouse Gas Emissions and Low Carbon Fuel Standard programs by the California Air Resources Board.