Navigating the complexities of sustainability reporting

There is mounting pressure from investors, employees, and customers for companies to live up to their promises and disclose their sustainability performance data. Regulations and reporting standards are also continuously updating and tightening. To name just a few, the mandatory Taskforce on Climate-Related Financial Disclosures (TCFD) focuses on climate-related financial risk disclosure at the organisational and product level, while other reporting standards such as the Sustainable Finance Disclosure Regulation (SFDR) have a broader coverage of environmental, social and governance (ESG) risks than TCFD.

The European Council has also recently given its final approval to the Corporate Sustainability Reporting Directive (CSRD), which requires that approximately 50,000 large companies operating in the EU publish regular reports on their environmental and social impact activities.

The current carbon management software market is saturated and there are dozens of solutions claiming to have the same features and capabilities, especially across scopes 1, 2 and 3 reporting.

Scope 1 emissions relate to direct emissions from buildings or assets owned or controlled by a company. Scope 2 emissions are indirect emissions associated with the purchase of electricity, heat, steam, or cooling. Scope 3 includes all other emissions generated within an organisation’s value chain, including upstream and downstream emissions, which occur as the result of the activities of an entity, but from sources not owned or controlled by that entity’s business. The diagram below shows examples of activities that generate emissions across all scopes and are applicable to various industries.

Due to the wide variation between the quality of the data available from different providers and between the data for different sectors and industries, a “one size fits all” approach will leave large gaps in reporting and an inability to harness the power of emissions data.

At Capgemini Invent, we understand that clients are unique in their technology estates, sustainability and business priorities, and in their overall strategies, calling for individual needs assessments and bespoke solutions.

In response to clients’ challenges in sustainability reporting, we have developed an ESG accounting decision tree. To suggest which reporting tool is the best fit for current and future clients’ needs, our decision tree offers 15 guiding steps to be used alongside findings from client workshops or stakeholder interviews, current and future technology stacks, KPIs and data requirements, and aspirations.

We use our strategically designed decision tree with a comparative matrix to assess the top 25 ESG reporting tools currently available in the market. The functionalities and parameters are across multiple industries and geographies, covering pricing structure and platform type. We are constantly updating and building this matrix from primary engagements with platform and software providers as well as insights from secondary research.

Our decision tree provides a quick, accurate and cost-efficient solution to help clients shortlist the top three most suitable ESG reporting tools to take forward into a procurement process. We can deliver this solution within approximately two weeks and have a team of sustainability experts at hand to undertake an in-depth analysis of existing data architecture, data assets, KPIs, data flows, and current and future reporting requirements.

Our solution helps you spend less time and resources on reporting and compliance with the ever-evolving standards and frameworks landscape, and instead to focus on delivering data-driven insights to drive meaningful change and positive impact.

It is ideal for clients who are manually consolidating their data for sustainability reporting (e.g., through Excel) and those looking to add additional features or capabilities to their reporting and/or considering a change of platform provider.

Please get in touch with Melissa at melissa.leung-pah-hang@capgemini.com if you would like to learn more about how we have successfully helped clients and how we can support you in this journey.