Investors and customers want to see data on water, energy, waste, emissions and other environmental matters. Climate costs are rising, and they want to know your company’s risk exposure. Investors shift their investments to fully disclosing companies, and away from companies with opaque or incomplete disclosures. Customers select vendors who will collaborate in environmental improvements, including decarbonization strategies.
In other words, customers and investors plan to make money with your data. Is your sustainability data ready? Here are four questions that may reveal your current data quality gaps.
1. Is your CFO confident in your company’s sustainability data?
When sustainability data is material to investors, the CFO bears a personal risk. Under Sarbanes-Oxley financial regulations the C-suite bears personal penalties for incorrect investor data.
Deliver that confidence with sustainability data that is as rigorously prepared as financial data. That means it is built in a system that is familiar to CFOs and Controllers, it can be tested and verified at scale, and the system is audited each year.
2. Can you make a timely environmental forecast for use in strategic planning?
At the heart of decarbonization is a forecast of future emissions, given future revenues. Without a change, they rise hand-in-hand. With change, carbon goes down while revenues go up.
To be relevant, sustainability data must be delivered on time, ready for use during the strategic planning season. The data must be reliable, so no one is showing a graph that is dominated by a few scattered outliers. Finance-grade sustainability data meets this test.
3. Can your company get outside financing based on its sustainability data?
Everyone is facing higher energy costs, increased water scarcity and cost-saving opportunities that will pay off over several years. Investing to reduce costs and increase resource availability has a clear gain. But is your data ready?
Imagine a project that costs $10 million and returns $2 million in savings years 3–10. That’s a potential $16 million in savings. But $10 million is a lot of money. Only when the capital budgeting team is confident in the savings numbers will the project be authorized. Often outside financing is used for the up-front cost, so the quick conclusion is: Finance-grade sustainability data can be used to get outside financing.
4. Can your company pass a Reasonable Assurance audit on its sustainability data?
Reasonable Assurance audits are as rigorous as financial audits, and under current regulations these will be required within 2–4 years. It takes 9 to 10 months to build a compliant data system. And when auditors put on that finance mindset, they have little forgiveness for data gaps, lack of materiality testing and so on.
Finance-grade sustainability data feels familiar to finance teams and auditors. It is prepared in a manner that has been demonstrated – with decades of experience – to increase data quality.
But for most sustainability teams there is a data quality gap. The mandate is to expand business impact, recommend internal investments, cut costs and to participate in strategic planning. Today’s sustainability data can’t get the job done.
Time to change to finance-grade sustainability data. You’ll find that a systematic approach saves hours of data work, scales across your company and cuts costs.
Ready to see how it works? Talk to GLYNT.AI
