Organizations are under pressure from all sides to provide Environmental, Social and Governance (ESG) data to demonstrate their sustainability. However, the barriers to ESG reporting have historically been high. Moreover, there is a number of ESG frameworks to choose from, making it a full-time job for companies to keep track of the ones they want to report against and source the data they need to do so.
Whilst many are calling for greater harmonization across the different framework providers, corporates and investors are also looking at ways to tailor standards to capture industry specificities, which create the ability to benchmark and compare ESG performance amongst similar organizations. As demand for sustainability information grows among stakeholder groups, standards provide value by ensuring that those reporting the information and those using the information are speaking the same language.
Whilst global reporting frameworks have existed for many years, industry specific approaches are relatively recent. The Sustainability Accounting Standards Board (SASB), developed an Sustainable Industry Classification System(SICS) which is comprised of 11sectors which subdivide into 77 industries. Its link between ESG issues and financial performance make it an attractive standard for investors.
On the other hand, a company looking to measure the economic, environmental and social impacts of its activities will be looking at the Global Reporting Initiative (GRI) framework, an internationally recognized sustainability standard setter for corporate reporting. Whilst both reporting frameworks can be used in combination, and complemented with industry specific custom disclosures, defining what a best practice standard looks like is challenging and the manual mapping of disclosures resource intensive.
However, with the creation of technology that makes ESG reporting more intuitive and affordable, that no longer has to be the case. The launch of DiginexESG has not only allowed organizations to take control of their own ESG reporting - the ability to dramatically accelerate the process has also opened up the opportunity to be a leader in sustainability by creating the industry standard.
There are huge commercial benefits for the company that sets the standard on ESG in their sector. These organizations will immediately be singled out as market leaders in sustainability, which is becoming increasingly important to customers and investors. It also allows them to create the benchmark of what “good” looks like for their industry and build an ecosystem of like-minded customers, suppliers and partners.
Creating a ESG Reporting Tool for the Maritime Industry
Hafnia is using DiginexESG to automate and improve its ESG data management and reporting. However, the company also identified an opportunity for the all-in-one platform for organisations to record, report, and verify their data to be used to create a new ESG reporting tool for the maritime industry, where there is an infamously complex regulatory landscape to navigate.
The collaboration between Hafnia and Diginex will begin with a joint study of key disclosures relevant to the maritime industry, selecting from best-practice frameworks, including the United Nations Sustainable Development Goals (UNSDGs), Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Disclosures (TCFD), and bespoke indicators that are specific to maritime trade.
The ultimate objective is to create an ESG reporting framework tailored to the nuances of the shipping industry and a maritime-focused version of Diginex ESG, which will help shipping organizations easily benchmark and measure their performance against their peers.
An ESG Solution Customized for your Industry
The maritime industry is a fantastic use case and is just the beginning. Financial services, manufacturing, retail - almost every industry faces its own complex challenges around sustainability and has unique regulatory frameworks to unravel. Diginex partners with organizations across all sectors, around the globe who are looking to set new industry standards.
With the ability to collect ESG data from their client network, organizations are able to make more informed decisions related to value and risk, set targets and improvement areas with macro data analysis to complement their own sustainability reporting, and benchmark industry best practices.
Moreover, by helping other organizations in the client network to improve their sustainability, organizations can create greater loyalty to the brand by providing value adding service, be seen as the market-leaders in sustainability, and drive a positive impact.
To learn you can lead your industry with a customised ESG solution based on DiginexESG, click here to find out more.
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In our third and last part of our ESG blog we look at how SMEs can navigate the regulatory landscape