Author: Andrea Sim McWhinney

Sustainability reports are usually viewed as the final step of the sustainability journey, in the contrary, it is only the beginning. How can companies move beyond reporting and start actioning on their ESG metrics? Read more below. 

Sustainable living is no longer a buzzword; it is a necessity in today’s world. Concerns over climate change, resource depletion, and social equity are putting pressure on businesses around the globe to act on sustainability. This journey begins with sustainability reporting. For organizations, it is an essential tool for communicating their ESG performance. It is important to understand that sustainability reporting should not be considered the end goal, but rather the beginning of a journey toward a greener, more responsible future.

Following sustainability reporting, what does a company need to do? Here are some actionable steps.

How can Rimm guide you to achieve your green goals?

Through Rimm’s AI powered flagship product – myCSO, clients have access to many features to guide them through their sustainability journey such as:

• Dynamic Materiality Map
• Introduction To Sustainability
• Carbon Calculator
• Sustainability Performance Dashboard
• Sustainability Report Generator
• Guided Assessment, Sustainability Standards and Frameworks
• SDG Impact Dashboard
• Various Add-On Modules

Through such features, Rimm’s clients can easily track and measure their performance and make strategic business decisions based on accurate data. When it comes to building a more sustainable future, what comes after sustainability reporting is most important. By setting clear goals, implementing strategies, engaging stakeholders, and striving for continuous improvement, companies can create a greener, more equitable, and prosperous world for future generations.

Interested to learn more about our solutions? Book a session to talk with our team today. 

 

Today, sustainability isn’t just a buzzword; it’s a critical component of long-term success and ESG principles are becoming increasingly important for companies. ESG benchmarking has become a valuable tool on this sustainability journey. In this concise guide written by Rimm Sustainability’s Senior Data Scientist Wei Ti Goh, we explore the world of ESG benchmarking and its significance.

Defining ESG Benchmarking

ESG benchmarking is the process of systematically comparing a company’s ESG performance to that of its competitors. It offers a structured way to measure and evaluate a company’s environmental impact, social practices, and governance standards. By doing so, it promotes transparency and accountability.

Choosing Key Metrics

The choice of ESG metrics for benchmarking depends on the industry and the competitors in question. Industry-specific metrics take precedence, addressing the unique challenges and opportunities within a sector. For instance, companies in the software industry often prioritize social aspects, focusing on data privacy policies, gender pay gaps, and training hours. However, certain universal metrics, such as Total Carbon Emissions and Total Energy Usage, apply across industries.

Benefits of ESG Benchmarking

The benefits of ESG benchmarking are manifold. Firstly, it helps companies identify their strengths and weaknesses in ESG performance. As the saying goes, “If you can measure it, you can manage it.” Armed with this data, organizations can prioritize ESG initiatives and allocate resources more effectively.

Moreover, robust ESG performance enhances a company’s attractiveness to ESG-focused investors and customers. It demonstrates a commitment to sustainability, which can translate into a competitive advantage. ESG benchmarking also plays a crucial role in ensuring compliance with regulations and avoiding penalties.

How Rimm can help?

Rimm has a data repository of over 18,000 companies which are spread across several geographical locations (Americas, Europe, Africa Oceania and Asian-Pacific regions). Through its analytical tools, Rimm also enables you to gain powerful insights into strengths and weaknesses, which you can use to benchmark against fellow peers’. Get relevant data that you can utilize immediately to grow your business, generate sustainable value, and make ESG a cornerstone of your company’s business strategy.

 

The new International Sustainability Standards Board (ISSB) standards help solve the problem of global reporting fragmentation, enabling clearer, more consistent reporting for SMEs. Learn how the standards can help your firm boost credibility and efficiency in your sustainability reporting.

As a small and medium-sized enterprise (SME), staying informed about the latest standards and frameworks that can impact your business is essential. This can be an onerous task given the fragmented jigsaw of global standards that have grown up around sustainability. The new International Sustainability Standards Board (ISSB) framework, announced in June 2023, is a major step forward as it aims to simplify reporting by setting a baseline for all companies.

Companies and their investors don’t currently have a common language for communicating about sustainability. But the ISSB’s first set of standards – IFRS S1 and S2 – aim to change all that by creating a common framework for all disclosures. This should bolster trust and confidence in sustainability-related information to drive investment and resourcing decisions. 

Let’s break down the new ISSB standards to understand how they can benefit your SME.

What is the ISSB?

The ISSB is an international organization dedicated to developing and promoting globally accepted standards. The International Financial Reporting Standards (IFRS) Foundation set up the board in 2021 to enhance transparency, credibility, and comparability of sustainability reporting by providing a comprehensive global baseline of disclosures.

The board’s creation helps consolidate and simplify the fragmented array of sustainability standards that has grown up over the last few decades. The Value Reporting Foundation (VRF) and the Climate Disclosure Standards Board (CDSB) have consolidated into the IFRS Foundation. And the ISSB builds on and consolidates the work of other investor-focused reporting initiatives, including:

• Sustainability Accounting Standards Board (SASB) standards
• Task Force for Climate-related Financial Disclosures (TCFD) recommendations
• Integrated Reporting Framework
• Climate Disclosure Standards Board (CDSB) framework.

ISSB will also be incorporated into the CDP global environmental disclosure platform.

The Global Reporting Initiative – another popular sustainability framework – has said it will be distinct but complementary to the ISSB, and the two frameworks are aligning their work programs. The GRI says its standard will ensure transparency on organizations’ impacts on people and planet, while the ISSB supports efficient and resilient capital markets. Together these two standards can provide a complete picture on sustainability impacts and performance, says the GRI.

Will ISSB standards be mandatory for SMEs?

Local regulators decide whether to mandate climate disclosures and to what extent their rules align with ISSB. Currently, the ISSB standards are not compulsory in most jurisdictions. But they could start aligning with global regulatory requirements as local rules evolve. 

The UK, for example, became the first country to mandate companies to make climate-related disclosures in 2022. These disclosures are currently based on TCFD, but there are plans to update them to reference the ISSB standards.

The UK rules currently only apply to large companies. However, the government plans to make climate disclosures mandatory ‘across the economy’, implying smaller firms will be included, by 2025. 

ISSB standards – the key features

The new standards apply to annual reporting periods beginning on or after 1 January 2024.

The rules are designed to be user-friendly and easy to understand, with practical guidance and examples to simplify implementation.

The standards are flexible, accounting for the varying legal, cultural, and economic environments in which businesses operate. This helps organizations comply with minimal burden or disruption to operations.

The standards are scalable, recognizing the diversity of organizations and different levels of readiness. This allows businesses to adopt them in a phased manner. SMEs can prioritize the implementation of specific standards based on their needs and resources.

The ISP framework takes an integrated approach, going beyond financial information to include non-financial factors such as environmental, social, and governance (ESG). 

Main requirements

The disclosures organizations provide for IFRS S1 (General requirements for sustainability-related financial disclosure) must be useful to financial report users in making decisions about providing resources to the entity. It requires entities to disclose information about risks and opportunities that could reasonably affect their prospects, including the entity’s cashflows, and access to finance or cost of capital over the short, medium or long term.

S1 requires entities to disclose information about their sustainability-related risks and opportunities – in particular: 

• Governance processes, controls and procedures the entity uses to monitor, manage and oversee sustainability-related risks and opportunities
• Strategy for managing risks and opportunities
• Processes for identifying, assessing, prioritizing and monitoring them
• The entity’s performance around sustainability-related risks and opportunities, including progress towards any targets the entity has set or is required to meet by law or regulation.

IFRS S2 (Climate-related disclosures) has the same key disclosure requirements as for S1 listed above, but for specific climate-related risks and opportunities rather than those relating to general sustainability. 

Disclosed targets should align with the latest international agreements on climate change – such as the Paris Agreement – and local plans, known as nationally determined contributions.

Where next?

Having launched its general sustainability and climate standards, the ISSB is also reportedly now exploring whether to extend its remit to cover areas such as biodiversity, ecosystems, human capital, and human rights.

The benefits for SMEs aligning with ISSB standards

SMEs have faced difficulties in navigating the complex alphabet soup of ESG regulations. But ISSB provides them with a solid foundation for improving financial reporting, enhancing business efficiency, and facilitating international growth.

The ISSB standards can help SMEs improve their reporting processes, ensuring consistent, accurate and reliable information. This transparency enhances credibility and helps SMEs attract potential investors and financing.

Aligning with the ISSB standards helps SMEs better manage risks by identifying how sustainability and climate issues may affect their prospects. 

It can help SMEs streamline their internal processes, making them more efficient and effective with improved decision-making, cost reduction, and operational excellence.

Adhering to internationally recognized standards also positions SMEs for global expansion. It enables SMEs to meet the expectations of international stakeholders, facilitates cross-border transactions, and simplifies compliance with regulatory requirements in foreign markets.

Keeping pace with the latest standards and frameworks is crucial for SMEs aiming to thrive in an increasingly competitive global market. By adopting the standards, SMEs can strengthen their credibility, attract investors, and unlock new opportunities for success. 

Want to learn more about Rimm’s solutions?

Browse our solutions catalog or book a free demo today!

AI is revolutionizing ESG data collection, quality checks, analytics and report generation. Here’s how to unlock the power of technology for a sustainable future with Rimm solutions.

 

As businesses strive towards greater environmental and social responsibility, artificial intelligence (AI) has become crucial for collecting and analyzing ESG data efficiently, says Faddy Ardian, Chief Data Scientist at Rimm Sustainability.

Here we look at how AI is transforming sustainability data practices and gain insights from Faddy on how AI is impacting ESG and sustainability performance reporting.

AI-enabled data collection

Traditionally, gathering, analyzing and verifying environmental, social and governance (ESG) data has been a labor-intensive and time-consuming process, often relying on manual surveys and reports. AI has revolutionized this landscape by automating data collection from sources such as social media feeds, news articles and financial records.

Using natural language processing (NLP) and machine learning algorithms, AI can rapidly analyze vast amounts of unstructured data and extract relevant insights. This efficiency saves time and improves the accuracy and reliability of ESG data.

‘Financial data is easy to gather and extract because it is structured,’ says Faddy. ‘But ESG information is often much less structured, there are fewer exact and consistent standards, so it is harder to extract. But AI can help.

‘It enables organizations to accurately measure and report their sustainability performance, and make informed decisions that promote a sustainable future. As the demand for transparent and responsible business practices grows, embracing AI becomes imperative for companies aiming to have a positive societal and environmental impact.’

Increasing transparency and accountability

Companies face increasing pressure from stakeholders – including investors, customers and regulators – to provide transparent and accurate ESG reporting. AI enables them to streamline data collection, validation, and reporting processes, reducing the risk of errors and inconsistencies.

Through AI-powered platforms, companies can automate their generation of comprehensive ESG reports, ensuring compliance with reporting standards and enhancing transparency. This automation saves time and resources and supports a consistent and reliable sustainability performance assessment.

Enhanced analytics and reporting

AI-powered analytics tools enable companies to delve deep into their ESG data, identifying patterns, trends, and correlations they might otherwise not notice. Machine learning algorithms can identify complex relationships between ESG factors and help businesses understand the impact of their sustainability initiatives. This data-driven approach empowers organizations to make informed decisions, set ambitious targets, and develop effective strategies for addressing ESG challenges.

Faddy says an example is that AI can help you identify risk patterns, such as around greenhouse gas (GHG) emissions, across different levels of your supply chain. This saves a huge amount of time compared to mapping risks without AI.

It can also help you benchmark and verify you are using the right documents to evidence your reporting by checking if it aligns with what peers in your sector and region are using.

‘AI can help confirm your measurements are accurate through outlier checks,’ says Faddy. ‘For example, if you’re an oil company, AI can tell you what your range of GHG emissions measurements should be. If yours is outside that range, it could be an error.’

AI can also help you with materiality. ‘Using natural language processing (NLP), we can help you identify which topics you need to track according to your sector,’ he says. ‘For example, if you’re in the software industry, data privacy is a key material sustainability factor. But if you are in the food industry, health-related issues may be more important.’

And one more thing – AI can help make your reports more presentable and written in good English.

Driving innovation and efficiency

AI’s potential extends beyond data collection, reporting and analysis. By harnessing these technologies, companies can drive innovation and develop sustainable solutions in areas such as, energy consumption, reducing waste, and improving supply chain efficiency.

For example, AI-powered algorithms can identify opportunities for renewable energy integration; enhance resource allocation; and minimize environmental impact.

Faddy says an example of how AI can help companies optimize their energy use is by calculating which floors in a building need electricity automatically turned off and when.

You can also then use AI to interpret the results and find ways to improve, for example, on how to improve your employment policies, by finding best practice case studies and other companies.

How Rimm can help

Artificial intelligence has become a game-changer in sustainability data collection and analytics. At Rimm, we empower companies to address ESG challenges effectively by automating data collection, improving transparency, enhancing analytics and reporting capabilities, and driving innovation.

To learn more about Rimm’s AI-integrated solutions, browse our catalog or book a free demo today!