Benchmark Gensuite Customer Conference

Sameer Vyas, Montrose Environmental’s Sr. Principal, EMIS, recently attended the IMPACT 2024 Benchmark Gensuite Customer Conference, where he broke down the importance of an enterprise data management system/centralized applications to manage EHS and Sustainability data for compliance reports, sustainability disclosures, and customer requests. He also provided a few pointers to consider when implementing these systems. Let’s recap!

Sustainability Disclosures & Excel

It’s time for your company to put together its sustainability report. Whether generating the report is your job, or you provide data to those responsible, how is your company collecting and aggregating EHS data? I’m willing to bet Excel is a prime suspect in some fashion.

With an increase in demand for sustainability data (whether driven by regulations, investors, or your customers), it’s more important than ever for sustainability data to be transparent, standardized, auditable, and accurate. Most companies wouldn’t even think of using Excel for their financial reporting due to the high degree of consistency, accuracy, and auditability requirements, so why would you use it for EHS and Sustainability reporting with similar scrutiny as financial reporting?

Almost half of all firms still use manual spreadsheets for their sustainability data collection, and many more likely use it in some fashion for data aggregation and analysis which have a variety of issues:

• Difficulty tracking the latest and greatest information due to various parties making edits to multiple spreadsheets managed by multiple users (i.e., versioning issues)
• Desynced formatting between various sources, making it more difficult for managers to aggregate data into a single format.
• Lack of compliance with Sarbanes-Oxley, which requires accuracy and reliability of financial data in corporate disclosures for investors. Yes, sustainability data is financial data.
• Inaccurate baselines and comparisons, which can more severely impact your organization with fees or reputation consequences.
• Potential risks for inconsistencies or errors because of user flexibility and reduced lock down and technology enforced formalization of governance processes.

The case for a centralized enterprise data management system

Ditch the Excel spreadsheet and avoid the reporting inefficiencies and errors. Instead, implement an Environmental Information Management System (EMIS). An EMIS system allows for centralized governance and oversight by providing a single location where managers can review data at a high-level to validate accuracy, consistency, and track performance and trends. Not only will this ensure your company is meeting industry requirements, but it also allows you to adapt to best practices. It’s good to be compliant, it’s better to have a competitive edge.

Best Practices

With developing and new regulations requiring carbon accounting to be on par with financial accounting, I’ll leave you with three key ideas/best practices to consider.

#1 – Develop an Inventory Management Plan (IMP)

Perhaps the most critical best practice is to define a systematic program, not just technology, of how your organization ensures, and can prove, meeting its objectives (e.g., net zero commitment/carbon neutrality). An IMP will align internal stakeholders around these goals and set boundaries around your strategy which supports a company’s disclosures. Also, roles and responsibilities within your company should be clearly identified and established. Material ESG topics/KPIs as company performance metrics are a relatively new concept that requires data from a broad spectrum of sources from various departments. It is pivotal to understand and map all the resources that will be involved in collecting and managing this data and what their associated processes are, ensuring its quality and meeting the needs and demands for reportable data from external stakeholders.

The Environmental Protection Agency (EPA) recommends creating a system-agnostic IMP that identifies the key indicators you require to report. It breaks down the following:

• Boundaries
• The data source(s) and/or assumptions
• Collection mechanism and frequency
• Calculations/formulas that may be required
• Aggregation and data substitution rules
• Reporting requirements – which frameworks and reports do these feed
• Management of Change (MoC)

In short, the first key best practice for using technology is not technology at all. It is having a clear purpose or end in mind, and a management plan that supports it.

#2 – Identify the technology

You want to select the right technology that will help you implement the IMP in a standard way. This includes data collection, calculation, and reporting (including comparisons to baseline and objectives). Read our recent blog for guidance on how to identify the right technology.

#3 – Automate, Analyze & Avoid Duplication

Limit manual entry as much as possible, and instead set up integrations to automate the collection of data from systems such as:

• Utility meters
• Fuel meters
• Measurement systems and sensor networks
• Process data historians
• HR systems
• EHS systems

By streamlining data collection, aggregation, and data analysis, you’ll save time and ensure consistency and accuracy. Additionally, Business Intelligence (BI) tools can help you slice and dice data in different ways, allowing you to visually identify outliers and uncover opportunities to improve your operations. Finally, with an increase in data that’s more trustworthy, you can set yourself up well for machine learning and AI to help you better analyze your data and suggest opportunities. A great example of this is using AI for materiality assessments and risk management through predictive analytics.

Improve Your ESG Data

EMIS systems are a necessity to aggregate auditable and accurate EHS data, which is becoming increasingly consequential with today’s regulations and investor and customer demands for transparent EHS performance insights. Are you ready to get started on implementing an EMIS system into your ESG data collection process? Our EMIS team can help you every step of the way – from developing an IMP to selecting the right technology for your needs.

Contact us today to learn more about EMIS implementation.