Unfortunately, there is no single miracle solution. Over the past year, we at MATERIALITY have tested or analyzed six or seven commercially available solutions that support ESG data monitoring. These were domestic (a few) and foreign (most) solutions, with prices ranging from several thousand PLN to several tens of thousands of EUR per year (for a medium-sized capital group). None of these solutions were ready „out of the box”; they required individual adaptation to the specifics of a given organization. None of them were fully adapted to the requirements of the most popular GRI Universal Standards.
For now, our proprietary system based on Microsoft Office solutions is winning. And if you haven't invested in a dedicated cloud solution yet, I would suggest building your own data collection system on shared Excel. Excel is software that virtually every office worker in every company is familiar with. This removes the barrier of learning a new, unfamiliar tool. Data collected in this way is easy to process further, and the results of the consolidation can be easily entered into a report draft, which is usually created in a word processor.
In my opinion, the most important thing in collecting ESG data is the attitude of the people who are supposed to provide this data. There are two issues worth addressing here. First, understanding the purpose. People who have been explained what sustainable development reporting is, what the report is for, and what knowledge about the organization it will provide not only to external stakeholders but also to employees, approach data provision with a completely different attitude than those who have simply been given a work order and a deadline.
Secondly, you need to invest a considerable amount of time in thoroughly, often individually, instructing team members on how to fill out data collection forms. Dozens of data monitoring processes carried out at MATERIALITY have allowed us to estimate the following ratio: every hour saved on explaining how to provide data is five hours that we will later lose on verifying data, correcting it, returning to source materials, and searching for errors. We explain, explain, explain—ad nauseam, until every person on the team knows what data we expect from them, in what units and format, where to obtain the data, and what audit trail to leave behind.
And finally, one last point: it is worth starting to collect data more frequently. Collecting data once a year is a challenge for everyone involved in the process. If we introduce quarterly ESG data monitoring, everyone will gradually get used to its regularity and become more efficient in providing high-quality data. It takes at least 3-4 reporting cycles for an organization to achieve high efficiency. In the case of quarterly reporting, this means one year. We obtain data for the sustainability report from the consolidation of quarterly data. Each quarter, current data on the status of strategy implementation and an overview of key performance indicators can also be provided to the management board.
If your organization is now in the final stages of preparing its report, it is probably too late to apply the above tips. But it is worth referring to them soon after the report is published and modifying the data monitoring process for the next year accordingly. ESG data about our organization is something that cannot be bought. We can buy a system to support its collection, we can hire a consultant to help us organize the entire process, but no one can replace the employees of all the companies in the capital group who have to provide the source data.
Or maybe... someone could replace them after all? It seems so, but that's a story for another edition of our newsletter.
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