Who - within organizations - should be mainly responsible for data collection, calculations and reporting on a company's environmental impact? This question is puzzling me, Lenny van Klink, co-founder of Salacia Solutions. And I’m wondering what your opinion is.
The question as to who should be responsible for impact tracking and reporting has been puzzling me. And I’m wondering what your opinion is. To paint the picture briefly: there is an increasing pressure from authorities, investors, NGO’s and customers for transparent, comparable and independent environmental impact reporting. Standards, metrics, guidelines and regulations are piling up. Just look at Europe, where companies encounter an almost impenetrable jungle of abbreviations: SFDR, NFRD, CSRD and terms like EU Taxonomy.
Companies will, over the next couple of years, be obliged to comply with these new regulations. The reporting requirements are such that companies have to report in qualitative terms and increasingly also in quantitative terms. Now, who will be responsible for the data collection, calculations and reporting? Let’s investigate who will be involved.
The most obvious counter is the sustainability manager, who faces the challenge of overseeing all new legislation and reporting requirements. They are however dependent on data that will have to be delivered by others in the company.
Does this mean we have to focus our attention on the operational managers or site managers to deliver the data needed and to make the calculations? True or false: isn’t it so that Operations has the tendency to see such data requests as additional red tape?
Perhaps then the IT-department can be of assistance? An often heard objection from IT against impact tracking is that the organization’s data quality doesn’t allow for it. Or that a new ERP-system is needed first, before impact tracking will become feasible.
Okay, let’s turn to the Finance department and the CFO. Finance is used to processing large amounts of data for financial reports. They know the drill of reporting. And they have an interest: banks and equity providers are tightening their terms and conditions for providing capital. Sustainability reporting is however a new ballgame for Finance and their focus is still on the dollar or the euro.
Should Legal step in? The increasing legislation will affect the license to operate. In a few years’ time a company will be in serious trouble if it doesn’t comply with this legislation. But, that is in a few years’ time. Is the urgency felt enough to consider this as a short term risk?
Perhaps it should be like the German’s say ‘Chefsache’: the responsibility of the CEO and the Board? And yes, we see some good examples of companies really stepping up in environmental target-setting and reporting once the CEO commits him- or herself to this topic, like Mr. Dolf van den Brink of Heineken or Mrs. Saskia Egas Reparaz of HEMA.
Who then is most obvious to take the lead in environmental impact tracking? If you see impact reporting as a burden it will continue to be a burden. If a company is however intrinsically motivated to really gain competitive advantage through reducing costs and environmental impact it should be a joint effort. Support from top level management is a ‘conditio sine qua non’. Translating environmental goals to every department will help to raise company-wide awareness. HR could play an important role in this. And perhaps integrating the data collection, currently performed by the sustainability managers, into the Finance department could help as well? This will help to bring the euro’s and the environmental impact on equal footing. Then we can replace ‘financial reporting’ into ‘encyclopedic reporting’, and isn’t that what we need?
Let me know what your thoughts are via LinkedIn or e-mail: Lenny.vanKlink@SalaciaSolutions.com