As we enter a second year of an unprecedented global pandemic, small and mid- cap enterprises continue to grapple with the resulting disruptions and economic consequences.
Despite facing issues such as liquidity shortages and operational management concerns, many small- and mid-cap enterprises (SMEs) are waking up to the fact that their organisation’s environmental, social and governmental (ESG) data has become a priority to not only shareholders, but customers and business partners as well.
”We have witnessed businesses around the world having to pivot their business models overnight to prioritize the health and safety of their employees and customers above the immediate financial success of the business,” notes Charles Tilley, CEO of the Integrated International Reporting Council.
“The connectivity between sustainability-related factors and immediate financial-viability is clearer than ever before.” One of the best methods of overcoming the ever changing operating environment is adopting the GRI guidelines for sustainability reporting.
Given that SMEs account for 95 percent of global businesses—and the majority of the private sector’s GDP, employment, and growth— the timing is right for these organisations to enhance their business strategy and brand, attract new talent, customers and financial resources through reporting ESG data.
In doing so, companies are ultimately creating greater transparency and accountability around their sustainability strategies. Thanks to savvy SaaS technology, any size enterprise can now collect and share ESG data that’s trusted and verified, thereby joining the global transition towards a more sustainable and equitable future.
What’s Held Up ESG Reporting in the Past?
Previously, SMEs have been discouraged for a variety of reasons. Take the methodological complexity when faced with the array of overlapping and inconsistent standards and frameworks and cost related to ESG integration, for example.
The good news here is that efforts towards streamlining reporting standards are underway, but will likely take sometime to execute.
Likewise, no need to balk about the cost of operating a system— there's increasing evidence that the cost for setting up and running a system for collecting and reporting on ESG data can rapidly be offset by cost savings. So, get yourself acquitted with the GRI standards, and prepare to implement it.
Additionally, many enterprises do not have the luxury of hiring a dedicated sustainability team despite awareness of the growing need.
To the same effect, those same organisations are also unable to dedicate the education, resources, and time to properly gather and report data. Even with this, you will find that the benefits of applying GRI sustainability reporting guidelines outweigh the demerits.
Why ESG Reporting Is No Longer an Option
Despite these constraints, it is becoming clear that SMEs must not only educate themselves on sustainability topics, but also put into place the necessary resources and infrastructure to supply transparent, high-quality data.
If there's no action taken, there’s potential for marketplace elimination in the coming years due to lower credit ratings, higher costs of capital, and perhaps most importantly, revised investor strategies.
With an expected $50trillion being invested in sustainable finance markets now, it’s no surprise that investors are increasingly demanding access to non-financial data and proof of how companies are embedding ESG values into their core business strategies.
How DiginexESG Can Help
All enterprises regardless of size or value, therefore, should feel encouraged to take a first step in ESG reporting—right here, right now. At Diginex Solutions, we’re addressing this urgent market need by providing an affordable and simple SaaS solution to SMEs looking to start their reporting journey.
Our tool offers a simple, self-guided user journey, AI-powered recommendations and a blockchain-enabled audit trail, all in accordance with various major reporting frameworks.
#DiginexESG eliminates that need for the litany of consultants (and the high cost associated with them), allowing any organisation to collect, aggregate, and analyze key data—ultimately creating a data-rich report in a matter of weeks.
Staffers can collaborate on the report together before publishing and sharing, as well.
Our technology therefore reduces the disproportionate burden of reporting, allowing smaller firms that are more agile, less bureaucratic, close to their investors and customers to rapidly catch up.
Democratizing ESG reporting through technology is critical for scaling sustainability reporting rapidly .It gives companies of all sizes a fair chance to compete in a new global market and the ability to support their individual business transformations. DiginexESG makes reporting accessible, affordable and possible to be completed by any team member, no sustainability experience necessary.
Companies need to make proper ESG-related investments today to ensure their business model not only survives, but thrives amidst the developments in today’s business landscape.
As a member of Issuer Service Marketplace, Diginex Solutions has joined a carefully selected list of service providers, curated by LSE.
In our third and last part of our ESG blog we look at how SMEs can navigate the regulatory landscape