Florent Bouguin, Chief Technology Officer at Optel Group, discusses the challenges and complexities surrounding environmental, social, and governance (ESG) reporting. With a multitude of ESG frameworks, many of which are evolving into legally binding regulations, companies are facing a maze of compliance requirements.
Various ESG regulations, such as carbon reporting, climate disclosure rules, and sustainability directives, are becoming mandatory for companies across different sectors and regions. The landscape is further complicated by the sheer number of frameworks and standards, estimated to be over 600 globally.
Tracking ESG metrics involves a comprehensive assessment of a company's operations, from supply chains to human resources practices. However, data silos and inconsistencies pose significant challenges in quantifying ESG risks and impacts accurately.
Common issues with ESG data include outdated and inconsistent information, leading to a lack of confidence in reported data among executives. Addressing the data dilemma is crucial for effective ESG reporting, emphasizing the need for digitalization, connectivity, and centralization of real-time data.
Mapping out supply chains is a critical first step for companies to identify environmental and social impacts, risks, and improvement opportunities. Collaboration with suppliers on ESG disclosure goals and the use of interoperable traceability platforms can enhance data collection efficiency and streamline reporting workflows.
Traceability solutions act as control towers, connecting primary supply chain data sources and ensuring accuracy and timeliness for ESG reporting requirements. Digital product or service passports provide transparent records of a product's lifecycle, aiding in compliance with regulatory standards.
By adopting a data-first approach and focusing on supply chain digitalization, companies can turn ESG regulatory compliance complexities into strategic advantages for long-term sustainability.
