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What right questions CFOs need to answer for ESG-driven transformation

These questions will not only help in designing the right measurement systems but also help the corporations keep ahead in performance reporting with the range of new disclosure norms being introduced by regulators. The ecosystem is rapidly evolving, with standard setters like SASB and IFRS issuing new guidance, and regulators, such as SEBI, SEC and the EU, already proposing new disclosure requirements focused on non-financial performance data.

The design of the ESG data capture and measurement should not be restricted to the internal operations of the corporation either. It needs to understand that the data should be measured across the extended value chain.

  • Third parties/ Supplier Relationship Management processes and applications.

  • Enriching master data across key business processes with relevant ESG metrics.

  • Supply chain including manufacturing, warehousing and logistics.

  • Hire to Retire processes including learning and development and health and safety data.

  • Record to Report, risk management, tax, ethics, compliance and other corporate governance systems.

Once these questions are recognized, the right technology platform for designing a proper measurement system and implementing becomes consistent. Designing and implementing the right measurement and analytics assets will help the company constantly monitor its progress and also track the ROI of various ESG initiatives being taken by the management.

It will help the organizations demonstrate to stakeholders like investors, customers, etc. About the company's progress on the ESG path through up-to-date data. To sustain and thrive in this new era of accelerating transformation and stakeholder capitalism, companies should embrace ESG data as a strategic business imperative and measure in real time its impact on key value indicators.

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