In the evolving landscape of corporate governance, sustainability reporting has transitioned from a regulatory requirement to a cornerstone of strategic business planning.
According to Greenomy, driven by legislative advances like the CSRD, the EU Taxonomy, and standards from the ISSB, alongside escalating expectations for sustainable corporate practices, ESG reporting has ascended to a critical priority for companies worldwide.
A mere five years ago, Microsoft Excel was the predominant tool used by corporations for sustainability reporting. Its balance of simplicity and flexibility made it an adequate choice for managing data and generating reports. However, as the complexity and volume of required ESG data have increased dramatically, the question arises: Has Excel reached its limits for ESG reporting?
Historically, sustainability reporting involved a mix of voluntary standards such as GRI, TCFD, and CDP, alongside a handful of binding legal frameworks like Europe’s Non-Financial Reporting Directive (NFRD). These frameworks provided significant leeway in reporting on broad sustainability topics, often resulting in disclosures that lacked comparability and transparency. This has changed with the advent of mandatory, structured disclosures aimed at enhancing both transparency and corporate accountability.
The CSRD has introduced rigorous standards, notably requiring auditable, structured sustainability reports directly overseen by company boards, who are accountable for their accuracy and quality. It also mandates engagement with stakeholders and explains how their feedback has influenced sustainability strategies. This shift not only demands detailed auditing but also standardization of reports through frameworks like the European Sustainability Reporting Standards (ESRS) which define the criteria for reporting.
Excel, traditionally not designed as a sustainability reporting tool, faces challenges in meeting these complex requirements. It lacks support for ongoing updates to standards like ESRS, making compliance difficult. The need for integrated tools to manage data collection, report creation, and compliance checks becomes evident when dealing with such detailed and regulated reporting processes.
Advanced ESG reporting solutions like Greenomy offer integrated standards and rules, ensuring effortless compliance and relevance to specific organisational needs. These tools facilitate better data management, reduce the risk of errors, and enhance collaboration across company structures. They support seamless connectivity, allowing data to flow without disruptions from internal systems to reporting platforms, ensuring data integrity and compliance.
Moreover, tools like Greenomy enhance the auditability of data with features like audit logs and data traceability, crucial for maintaining transparency. They are also equipped to produce regulatory-compliant, machine-readable reports in formats like Inline XBRL (iXBRL), which will be required under the CSRD by 2026.
While Excel has been a versatile tool for data management and report generation, its capabilities are now outstripped by the demands of modern ESG reporting standards. Companies are increasingly recognizing the benefits of transitioning to dedicated ESG reporting software, which not only meets regulatory demands but also provides a competitive edge by offering deeper insights into sustainability performance.
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