Best Practices for ESG-Accounting Data Integration

Firms face more need to mix data on environment, society, and rules (ESG) with money reports. By mid-2024, more than 20 places, counting the UK, EU, and Australia, will follow ISSB rules, making ESG info as key as money data. Yet, many firms find it hard due to split systems, hand-done data work, and rule checks.

To win, companies must:

• Mix ESG aims with money plans.

• Set clear rule frames for data truth and who is to blame.

• Do double checks on key ESG points.

• Put all ESG and money data in one place using tools like neoeco.

• Make data grab and check automatic to cut mistakes and up work speed.

• Be ready for checks with strong check rules and third-party ok.

Mixing ESG and money data isn’t just for following rules; it brings trust, cuts risks, and helps make better choices. The right tools and ways can change ESG reports from a hard task into a key win.

Setting Goals and Building Rules

Mixing ESG and money data is tough - it needs clear aims and firm lead. Without good rule sets, even top data setups won't hit the hard check levels set by groups like ISSB and CSRD.

Linking ESG Goals with Money Plans

For ESG work to do well, they must fit with money aims, making a plan that all agree with.

It starts by seeing that money, green, and work systems are all linked. Look at Unilever's Big Green Plan from 2010, for an idea. They did not just aim high for the earth; they tied these to real business gains. By working to make health better, cut earth harm, and lift lives, Unilever also cut costs and did better work.

To find your group's ESG heart, ask key things: Why does ESG count to us? What drives our ESG numbers? Who hears about our ESG work?

Patagonia shows another great case. The company’s motto - "We're in business to save our home planet" - hooks its earth goals to its work plans well. By picking reused stuff, using less water and power, and backing small earth help groups through its 1% for the Planet act, Patagonia has not only kept loyal buyers but also won wide praise for its earth work.

For firms in the UK, the view must reach past just following rules. It's about making money-wise green plans that show how ESG work helps the whole business win.

To make these dreams come true, you need firm rules set in place.

Making a Rule Set

To mix ESG and money well, firms need a group rule set that joins money and green teams. This isn't for more meetings - it's for owning up and making sure both sides aim for the same things.

The rule set should have folks from money, green, work, risk, and top lead roles. Each one must know their tasks, looking at things like data rightness, report times, and rule-following. A top money role and a top green role should head this group to keep a balance.

This set-up must make clear steps for data checks, okaying what you show, and regular look-overs of how things mix. Without these steps, firms risk making ESG reports that fail under the same checks as money lists - a big problem under ISSB rules.

Another main task for the rules group is setting who owns the data tasks. For example, who gathers Scope 3 gas data? Who checks the money impact sums? Who makes sure the data is up to check standards? These must be clear before any mix work starts.

By making this rule set, firms not just meet the rules but also link ESG work to money results, which is the big aim of mixing.

Once rules are set, the next step is to see which ESG points are key for your work.

Running a Double Materiality Check

Double materiality is a good way to find the ESG points that are big for your work and for people who care. It looks at both money value and the green and social effects of what you do. As Deloitte puts it, "The checks on effect and money value are tied" and make firms look at "how these two parts lean on each other".

In Europe, 40% of firms have done a double materiality check, while 46% are doing it now. More and more are using it, showing it's key for CSRD rules and smart plans.

The step needs talking to folks through talks, polls, and setting scenes to find big green things. Firms should set clear marks for spotting big Impacts, Risks, or Chances (IRO) that fit with work goals and what folks expect.

Volkswagen's double materiality check is a good study. It found big risks with its gases, which made the firm speed up its move to electric, cutting gases by 15%. This shows how the check can shape work plans and give real results.

Unilever’s 2023 talk gives another case. The firm looked at how climate change hit its work, like less farm food from bad weather. It then saw money risks from more costs for raw stuff and checked how green farm ways could face these tests.

"A double materiality assessment is the essential first step towards CSRD compliance that is needed so that organisations can focus their subsequent efforts on the sustainability matters that are most relevant to them and their stakeholders." – PwC

The results of these tests should lead how you blend your data. Say, if climate risk ranks high, your gear must track carbon outputs and their money effects. On the same note, if worker ways are key, you need to link HR stats with money signs.

Getting and Handling ESG Info

Good ESG info is key to mix well with ESG-counting. Without it, even top tech may mess up when checked by ISSB and CSRD needs. The aim is to match ESG facts with money facts by making systems that get, sort, and check info for both green and money groups.

Mixing ESG and Money Info

A big block is the split between ESG and money info systems. ESG stuff usually stays apart, and money info does too. A BARC study shows that 60% of companies say they want better ways to link these. Putting all data together is vital to connect ESG wins with money results, showing how green moves help the bottom line.

The fix? Put all ESG and money data on one spot for all to use. Benjamin Negre from Galileo Global Education shows how good this plan is:

"KEY ESG enabled us to streamline and centralise the reporting process and customise the metrics so that they are relevant for our business."

Start by doing a full check of all your data. Find all places where you get ESG and money data - like from money tools, energy counts, worker programs, or lists from sellers. Next, clean up and sort the data so it all matches.

Then, link key ESG things to money records. Say, if your place cares a lot about CO2 in the air, link those numbers to money stuff like energy costs, CO2 passes, or earth-friendly money plans. This step is key for ISSB notes, as it joins up green records to real money effects.

Tools like neoeco help this step by putting ESG impact stuff right into money deals with tools like their FiS Ledger. This mix makes sure every cash out shows what it does to the earth and people, making the data ready for checks from the start.

Putting all data in one spot also makes it ready for auto checks and live OKs.

Making Data Collection and Linking Automatic

Touching data by hand is slow, can have mistakes, and is hard to make big. Auto jobs can do the heavy work, like pulling data, checking it, and placing it. Instead of pulling numbers by hand from many places each month, auto systems put data straight into your main spot. This cuts mistakes and lets your team look at details, not just type in data.

Rocco Meraglia from Svante shared his story:

"KEY ESG has made it simple to understand ESG, especially carbon accounting for Scope 1, 2, and 3 reporting. Capturing all the required data for our sustainability reporting was a daunting task at first, but KEY ESG has helped us put a strong process in place and deliver on our goal."

AI tools can make it easier to pull apart, set straight, and look at data to spot patterns. This is very handy for dealing with wide Scope 3 emissions, which often means managing lots of suppliers.

For instance, in 2025, Downer used the IBM Envizi ESG Suite to make ESG tracking the same all over and put it in one place. It made reporting automatic. This saved time and gave out data that was the same every time, which auditors could rely on.

To make this work well, set easy rules for sorting out new data. For example, when you get energy info from your places, the system should work out emissions itself, sort costs, and make updates in the right money accounts.

When machines handle the data and its sorting, the next thing to look into is strong checks to keep it right.

Looking at Data Right and Checks

Even with machines on the job, tough checks are key to keep data right. The BARC study showed that 42% of people still see troubles with data quality.

Checks by machine should be your first guard, while many steps in control keep data true. Make rules to spot odd stuff, like big jumps in numbers or data that's gone and compare new facts to old ones to find mess-ups soon. Like when energy use goes up 50% with no clear reason, your system should set off a check alarm.

PepsiCo uses a strong five-level check system to make sure things stay same, clear, and in line. These steps make ESG data ready for audits and meet both money and green needs.

Checks by a third party are also key as rules get tough on fake green acts. As NSF points out:

"Third‐party assurance is vital in a market where greenwashing and false claims erode trust."

Not hitting these marks can cost a lot. In 2023, Deutsche Bank's DWS had to pay £27 million to the SEC for saying its ESG use was more than it was. With over 600 ESG rules all over the world, as Ernst & Young pointed out, checking them on your own is key to show you follow them.

In the end, it's key to keep good records. Write down where you get your data, how you deal with it, and who checks it. This helps with checks from outside and lets your team find and fix problems early.

The best way to make sure things are right is to mix auto checks with people looking over them. While systems can spot clear mistakes and point out things that don't match, you need people with experience to look at the data and make sure it fits with goals for both green and money matters.

Easy Ways to Mix Tools and Steps

Picking the right tools can make mixing ESG-accounting from a hard task into a smooth, fast set up. With new tech now linking green and money data, it's easier to meet ISSB and CSRD musts. Here, we'll look at the tools and ways that build a ready-for-check ESG-accounting setup.

When you have good data, the next move is to put in top tools and steps to make sure ESG-accounting mixes well.

Using FiSM Tools like neoeco

FiSM tools are changing how groups deal with ESG data by tying green measures right into money moves.

Take neoeco, for one. Its FiS Ledger puts over 90 ESG effects into each deal using two-way rules. This means green and social impacts get noted with money data. The tool meets world rules like ISSB (IFRS S1 & S2), CSRD, and GHGP, all in one spot.

With AI help, neoeco makes data grab, map, and show tasks easier, cutting manual slips and work needs. For firms with big supply chains, this help is key for watching Scope 3 leaks over many sellers.

What sets FiSM tools apart is their ready-for-check design. By mixing green data as well as money facts, money teams can make reports that fit rules. These reports can touch on up to 96 ESG effects and use ready models set for big plans.

When data is grabbed, tying ESG facts to accounts systems finishes the setup, making a joint report frame.

Tying ESG Data with Money Systems

For groups using account tools like Xero, QuickBooks, or big ERPs, strong API ties make smooth links to ESG data spots, not messing up what's there. This makes a joint system - a single truth spot - that brings together money and ESG data.

APIs are key to these mixes. They let ESG tools pull money data from account systems and push green facts back. This cuts data mismatches and makes sure all green facts are clear.

For small groups on cloud account apps, direct ties are a smart pick. These links auto-sync deal data with ESG tools, where green impacts are figured and sent back into money reports. It all happens as it goes, making monthly reports as easy as making one, instead of pulling data by hand.

Energy counts are another main mix point. Smart meters can send power use data straight to account systems for cost split, while also giving out emissions data to ESG tools. This keeps track of power costs and carbon tracks together.

HR systems can also link to watch social facts like worker joy, learning hours, and mix figures. When these facts mix with money data, groups see clearer how cash put in people affects all business results.

The main goal is to make it so that data on how we use things can move as easy as money data does. Like when someone buys stuff for the office, the price and how it hurts the Earth get noted down right away.

Making Reporting Easier

Old ways of reporting just aren't fast enough for today's needs to share ESG info. Going from once-a-year reports on how we use stuff, to every three months or even every month, means we need to use machines to help at each step.

Machines can write up early versions of reports in just a few hours, letting us spend less time on just gathering data and more time on doing something about what we find.

Workflow automation goes beyond just making reports. It also helps with approval steps, telling people who need to know, and meeting rules. For example, if pollution data goes too high, automated tasks can warn the right bosses and start steps to fix it.

Using set templates for reports also keeps things same over time and different rules. Instead of starting from zero, these systems use ready templates to get the latest facts and do needed math. This is great for ISSB reporting needs, which want special ways to show info.

By mixing ESG reports with current approval setups, we treat green data as key as money data. This way, it gets the right focus and check ups.

Automation is not here to take over human thoughts - it makes them better. By taking on simple jobs like handling facts and checking them, it lets pros pay more mind to thinking, making plans, and talking with key people. This change - from gathering facts to making sense of them - is where ESG-accounting setups show their true worth.

Making Reports, Sharing Info, and Getting Better

Change hard ESG numbers into easy, ready-for-check reports that help with work choices and build trust.

Making Easy ESG Reports

Earning trust from people starts with clear, simple to get reports. It's not just to meet rules; good sharing shows your real ESG work and plans.

To keep trust, ESG info needs to be ready for checks, backed by clear records. Outside checkers will look at green claims as hard as they do money facts, so having full and true info is key.

Now, ESG reports use one source of data for many needs, like ISSB, CSRD, and GRI. No need to make many reports; one tool lets you make special ones from the same data. This way makes things smooth and keeps them the same.

The top ESG reports do more than show numbers - they share a strong story. For example, they show how using less energy cuts costs and drops pollution. This way of telling stories helps people see the real perks of ESG work and its part in your group's future win.

Tools like charts, maps, and info pics make hard data easy to see, adding to big data lists but not taking their place.

It's just as key to fit your talk to who you're speaking to. Investors might look at money risks from the weather, while workers might look at how mixed or safe the place is. Giving sharp, right info to each group makes sure your point hits home.

"Engaging stakeholders is crucial for effective ESG reporting as it ensures that companies consider the perspectives and interests of all relevant parties."

Using a full report style not just builds trust but also gets your team ready for ongoing checks and deep looks into ESG policies.

Looking Over and Understanding ESG Info

Clear reports are the first step - regular study turns plain data into steps you can take. By always looking at ESG stats, you can see trends, find where things need to get better, and make smart choices that help both your team and those who have a stake in it.

Checking things every month finds problems early but stops too much fuss over details. Keep an eye on main numbers that fit with your work plan and what people expect from you.

Reviews that pull in all departments are very useful. By mixing views from HR, how things are run, and money matters, you can tie ESG results to wider work goals. These team talks make sure no key tie between ESG issues is missed.

"ESG data analytics provides numerous insights to organisations that need actionable information to report on their progress toward improving their ESG performance and making informed decisions." - Ken Petersen, Associate Director, Product Management, Wolters Kluwer

Dashboards and AI tools help you see trends and chances. For example, a short rise in energy use may look bad, but a long view might show it's due to seasons or growth. Seeing links between ESG scores and how well a business does can show the best ways to get better.

Don't look down on what people tell you. Numbers alone don't tell the full tale - worker surveys might tell why it's hard to meet diversity goals, customer words could show changes in want for green products, and investor questions might bring out new ESG risks. This feedback gives more to your number analysis.

After you get insights, keeping your numbers good is key for ongoing success.

Keeping Numbers Good Long-Term

Getting good ESG data is not just once - it's always. By making this part of your day-to-day work, you make sure your green reports stay true as you grow.

A big step is to bring ESG data into your yearly check plan. Treat green numbers as money data by having outsiders look over how you gather numbers, check math, and see if your controls work.

Having others check your work adds trust. Third-parties can check things like carbon marks or social impact, which is good when ESG results affect money terms, rules, or how people see you.

Rules for handling data are key to keep it good. Say who owns each data part, note any changes to how you figure things, and make ways to follow how data moves in your systems. Do this like you do for money reports.

Teaching often makes sure everyone who gathers ESG data knows their job. This has green teams, money folks, and work staff. As rules and norms change, continuing to learn keeps your team on top.

Your tech needs constant care too. Update programs to fit new report norms, keep tech links between systems, and save past data for past trends or rule checks.

The way to keep doing well long-term is to weave ESG ideas into your main business moves. When green numbers are part of how you plan money, check work, and pick strategies, the number quality gets better as it's key to daily work.

Groups that put good ESG data first get ahead. Sure, on-time info helps make better choices, cuts rule risks, and builds trust with people - all this helps you stay strong and do well in a world caring more about green living.

Ending

Using ESG info with money books sets up a clear and strong company. Firms that mix these parts well can make better choices and earn more trust from others.

As said before, this needs a sharp plan, clear aims, and tight control. Even the best tech can't help without good watch and fit. Firms must match their ESG aims with money plans, making sure their green steps help their work goals. By doing two-way checks, groups find ESG bits that hit both their work and the world around them. This focused way makes sure efforts go to key areas and fits with new rules like CSRD and IFRS S1 & S2.

Tech is key in this change. Tools like neoeco use AI to speed up tasks that used to be slow and hard. By mixing money and green info on ISSB-ready sites, firms can give clear reports while keeping up with now-time work checks.

In all this mixing work, it is key to keep data right and well-checked.

Green money work grows as ESG and money info mix more. Money pros lead in making green moves. Groups that pick good tools, have solid control, and keep reports clear will be set to meet what others want and shifts in rules.

At last, true ESG-money mixing is not just for meeting rules - it's a way to make smarter choices, dodge risks, and give lasting worth. Firms that take this path will see that strong ESG info meets rules and lays a base for deep, long change.

FAQs

How can a business match its ESG aims with money plans the right way?

To match ESG aims with money plans well, firms must mix ESG rules into their key work and choices. A smart first step is to have clear and countable goals. Using plans like SMART makes sure ESG goals are clear, doable, and match with the firm’s big aims. This makes people answer for things and brings good results.

Another main move is to add ESG info into money setups. This lets firms keep an eye on how well they are doing and meet the world rules like ISSB and CSRD. Tools like neoeco make this easy by setting up data grabs, making reports ready for checks, and giving live looks at how they do in environment, social, and rule areas. Using these ways makes things more see-through, makes people who care trust more, and helps the firm keep growing right.

What is Double Materiality in ESG Reporting, and How Can Firms Check It?

Double Materiality in ESG Reporting

Double materiality is key in ESG (Environmental, Social, and Governance) reporting. It looks at two main things: financial impacts - how green issues hit a company's success - and external impacts - how the firm's work changes society and nature. This two-way view makes companies give out fuller details, driving more clearness and answerability.

To do a strong double materiality check, firms should:

• Talk with people involved to find big ESG risks, chances, and effects.

• Gather teams from different parts to look at and sort these issues well.

• Follow set rules, like ISSB or CSRD, to keep up with laws.

By taking this path, firms can face ESG problems well, build up their strength, and match new law needs.

Related posts

• ESG Data Collection Checklist for Enterprises

• ESG Software Integration: FAQ for CFOs

• How Integrated Reporting Aligns Finance and ESG

• How CSRD Materiality Impacts Financial Risk Management