Key Takeaway
Slow, manual, point-in-time sustainability reporting relies on out-of-date estimates and exposes organisations to reputational, legal and market risk. Near real-time, high-frequency granular data, collected automatically through APIs, delivers the accuracy, agility and forward visibility needed to keep pace with changing regulations and track progress toward net zero.
As sustainability reporting grows in complexity and importance, Tom Anderton, Commercial Director, explains why slow and steady will not win the reporting race. Near real-time data is where the organisational benefits lie.
Corporate sustainability reporting has for too long been done manually and infrequently. In the process, organisations potentially rely on inaccurate or out-of-date estimations of the complex systems they report on. Too often an Excel spreadsheet carries the burden of assisting organisation-wide change and delivering net zero emissions in line with 1.5°C of warming by 2050. All due to the fact that collecting sustainability data has been routinely challenging and reporting it has been time-consuming. In most cases, it still is.
The growing importance of greenhouse gas (GHG), energy and sustainability reporting makes it necessary to change to faster, more accurate data collection for precise, actionable reporting that can help all organisations achieve their net zero targets. Without a change in data collection systems, organisations face the potential of reputational, legal or market risk.
Financial data, incentives and sustainability information are now linked. Failure to report accurately and on time means stakeholders are unable to judge the legitimacy and effectiveness of their sustainability projects, while investors become restless as ESG requirements are not evidenced. The way forward is near real-time data collection.
For further insight into what sustainability reporting covers, see our guide to ESG frameworks and reporting standards.
APIs for Organisation-Wide Data Collection
Sustainability reporting is hungry for data. What it consumes comes from a sweeping range of sources. More often than not this data has been siloed in different systems and only accessible through manual extraction and input somewhere else. The infrequency means anything collected is quickly out-of-date and inaccurate.
Application programming interfaces (APIs) free that data from manual, siloed systems by automatically collecting and storing it in a centralised system. This helps overcome the silos created by slow and difficult collection methods. APIs effectively work as a call and response between two systems that previously couldn’t talk to one another. The process is automatic, near real-time, and helps to ensure the right data is in the right place at the right time.
Where organisations want to formalise how this automated data is owned, controlled and governed, the next step is to build a reliable sustainability data framework.
The Benefits of Near Real-Time Sustainability Data Collection
Regulations change, sometimes faster than expected, requiring those responsible for sustainability reporting to respond accurately despite the ‘shifting goalposts’. Near real-time data collection helps organisations keep pace with any potential regulatory or reporting changes that happen, ensuring accuracy and agility.
In addition to changing regulations, near real-time data collection helps to hedge against many potential risks. For example, resource and financial risks, such as the efficiency of energy use and its costs, can be monitored closely, and having near real-time insight helps to mitigate them before they materialise into full-blown problems.
Organisations can also closely monitor their wider strategies, including sustainability and net zero goals, by collecting near real-time data and tracking KPIs. Having insight into their current performance, rather than an out-of-date months-old performance snapshot, presents an opportunity to monitor progress towards important milestones along the way to their strategic goals. This empowers decision makers to change tactics long before the organisation has failed to meet a goal and can help form narratives that appeal to investors and other stakeholders.
The datasets produced this way are exactly the kind now expected to be traceable and defensible – see our briefing on why assurance-grade sustainability data is now expected.
Near Real-Time Upstream Supply Chain Data and Market Differentiation
Near real-time data collection that’s effectively outside of an organisation’s system boundaries is much harder to collect. For GHG emissions, this has become known as the problem of Scope 3 emissions, because Scope 3 is everything up- and downstream in a supply chain. Near real-time data can help to partially overcome this issue while setting the business apart from its competition.
An organisation’s Scope 1 and 2 emissions, everything it does directly, are effectively its customer’s Scope 3 emissions. By getting better quality, near real-time data on its operations, an organisation can make its business more attractive to others with sustainability targets. Near real-time data collection within an organisation makes it easier for other organisations to report their data as part of their own supply chain.
In the long run, near real-time data supports competitiveness and business reputation, and lets organisations track progress towards carbon neutrality and net zero. For the detailed methodology behind collecting and calculating value-chain data, see our guide to managing supplier data for Scope 3 reporting.
Turning High-Frequency Data into Reporting Advantage
By integrating sustainability frameworks and GHG software, the speed of data collection available now can overcome operational hurdles and give investors and stakeholders confidence. High-frequency granular data is the practical foundation that lets organisations move from annual, point-in-time disclosure to continuous, decision-useful reporting.
To put this into practice, explore TEAM Energy’s sustainability reporting support or see how carbon accounting software centralises high-frequency data into a single source of truth.
Related Guidance
- What Is Sustainability Reporting? ESG Frameworks Explained
- How to Build a Reliable Sustainability Data Framework
- Energy Data Is Becoming a Strategic Asset
- Audit-Ready ESG Data Is Becoming a Baseline Expectation
- Supply Chain Decarbonisation and Scope 3 Emissions
- From Compliance to Competitive Edge: How ESG-Driven Sustainability Reporting Wins Business
- Sustainability Reporting Framework.
Written by Tom Anderton – Commercial Director, BSc(Hons),
Tom is TEAM Energy’s Commercial Director with over a decade of experience in carbon, sustainability and energy management software. He has worked across the full software development lifecycle – from requirements capture through to implementation – before leading TEAM’s commercial function. Tom works closely with public and private sector customers to deliver integrated carbon reporting, accounting and management solutions aligned to UK frameworks including SECR and GHG Protocol. He holds a BSc(Hons) in Geography from the University of Edinburgh and is a certified PRINCE2 Practitioner.