April 24, 2023

It’s no secret that ESG (Environmental, Social, and Governance) is becoming more important in the business world. In fact, a survey of over 250 CFOs found that 70% believe sustainability issues will significantly affect future financial performance, while 59% think ignoring sustainability issues will lead to financial risks (Deloitte). Finance functions can support ESG efforts by integrating ESG metrics into financial planning and analysis, developing key performance indicators, engaging stakeholders, and aligning initiatives with business strategy.

Why is this mission critical?

Financial reporting is an essential aspect of ESG strategies. By connecting financial reporting to sustainability metrics, finance teams can help companies achieve their ESG goals. CFOs can leverage financial data to develop strategic ESG initiatives and align capital with green financing practices. Additionally, finance teams can take the lead in ensuring that all ESG efforts are accurately measured, reported, and communicated to stakeholders. This includes producing ESG reports that highlight the company’s ESG performance and its progress toward meeting its sustainability goals.

Data is key when it comes to ESG efforts. To save our scarcest resources, we need to use our most plentiful resource—data. High-quality, comparable ESG data is essential to increase opportunities for sustainable finance. Data sets the benchmarks for climate finance decision-making, improves intelligent processes and standardization, increases trust and transparency, reduces duplication, and provides the crucial security and auditability we need for enhanced reporting.

However, the challenge lies in capturing relevant data that is consistent, comprehensive, and of high quality. Without the ability to track and report sustainability metrics, CFOs will be unable to meet both investor and management expectations. Since there is no set journey for institutions as they begin recording, reporting, and acting on ESG-related data, they have struggled to understand what data is available and relevant and how that data should be captured. Understanding this is essential for firms – not only to guide internal ESG efforts but to ensure transparency with external stakeholders.

How can you support these efforts?

One way finance can support ESG efforts is by using technology solutions like Catalyst. Catalyst is a platform that provides comprehensive data, insights, and analytics. It helps CFOs and finance teams make data-driven decisions that align with ESG objectives. The platform aggregates data from multiple sources, standardizes it, and presents it in a user-friendly format. With Catalyst, finance teams can ensure the accuracy and completeness of their reporting and gain insights into their performance.

Catalyst helps finance teams understand the value of ESG efforts and communicate them effectively to stakeholders. It provides a common language for ESG and helps bridge the gap between finance and sustainability teams. With Catalyst, finance teams can take the lead in driving ESG efforts within their organizations and contribute to creating a sustainable future.

So what now?

ESG is no longer just a “nice to have” for companies. It is now an essential aspect of their operations and can positively impact their financial performance. Finance functions have a vital role to play in supporting ESG efforts. By leveraging technology solutions like Catalyst, finance teams can ensure the accuracy and completeness of ESG reporting, gain insights into their ESG performance, and contribute to creating a sustainable future.

To learn more about how Catalyst can help your organization’s ESG efforts click here.