12.7.24 understanding

1. Understanding the potential risks of neglecting ESG requirements can be the key to gaining a significant competitive edge. We are an ESG Awards, Businesses should start constructing more comprehensive ESG data governance since ESG data collecting is swiftly transitioning from voluntary to require to satisfy the increasing needs of their biggest clients. Due to limited resources, businesses must choose their investments carefully to enhance the collection of ESG data. We have identified seven best practices for companies that are just starting. Businesses must first choose who, or what group, will ultimately be responsible for gathering and reporting ESG data. Initially, many companies rely on their current internal audit, risk, compliance, or financial reporting teams to establish the program and make plans for a separate budget and workforce to take up ESG management in the future. As one of the leading Sustainability Awards, the emergence of the ESG Controller, a position that would handle ESG reporting similarly to the CFO's handling of financial reporting, is one trend we're seeing. Companies are turning to an ESG Controller to take ownership of gathering and reporting consistent, accurate, and audit-ready ESG data from various sources. If you're starting, consider starting with one of the widely accepted voluntary reporting frameworks (such as SASB, GRI, or TCFD). These frameworks provide a solid foundation for most upcoming laws and a wealth of implementation resources. Speak with your biggest clients as soon as possible—for example, before they require decarbonization pledges as part of their value chain. When choosing your reporting structure in step 2, determine whether they prefer it. As an expert ESG Award, investing early in purpose-built ESG data gathering technologies, as opposed to labor-intensive manual data collection, can maximize the impact of your small team when you're being asked to accomplish more with fewer resources. There are many other tools available; conduct your research and choose the platform that best suits your level of maturity. To assist in creating systems

2. ready for audits, consider recruiting practitioners with experience in environmental science, ESG reporting, corporate social responsibility, and experts in assurance and internal control. Since ESG is a team sport, there is much room for cross-functional training to give your staff members possibilities for professional growth and bring new skill sets to your company. To help you as Sustainability Awards, the growing pains businesses experienced in 2002 after the Sarbanes-Oxley Act (SOX) was signed are striking similarities with today's ESG issues. Companies had to set up internal controls over financial reporting, put new procedures in place, and start gathering data from departments that had never before submitted supporting documentation in a comparatively short time. As one might anticipate, several reporting cycles during those initial years were required to find and fix problems. With ESG, it's no different: businesses that implement robust procedures to guarantee the quality of their ESG data will be better equipped to spot and fix any problems before they have adverse effects. In our role as ESG Awards, examine comparable businesses in your sector that may have reached a higher level of ESG reporting maturity and determine whether their investments and disclosures suit your company. There is no turning back from ESG reporting, and small and medium-sized enterprises must prepare for dire consequences. As customer requests become required, companies prioritizing enhancing their ESG data governance will have an advantage over their competitors. Your company won't be playing catch up if it uses the lessons from SOX and immediately invests in people, procedures, and technology. Aspiring companies will see the chance to maintain a competitive edge over their rivals and meet the demands of their essential stakeholders by offering high-quality ESG data.