The introduction of the International Financial Reporting Standards (IFRS) sustainability disclosure standards marks a transformative shift in corporate reporting, integrating sustainability disclosures with financial performance. These standards demand transparency, granularity, and rigor, challenging organizations to rethink their reporting processes. Traditional methods鈥攔eliant on manual processes, siloed data, and fragmented systems are no longer sufficient. Companies must embrace technology as a strategic enabler to meet these demands, with generative AI (GenAI) and advanced IT infrastructure leading the charge.
Sustainability reporting requires organizations to aggregate and report vast amounts of financial and non-financial data, often sourced from disparate systems. This complexity presents several critical challenges:
Data availability and integrity
Sustainability metrics, such as Scope 3 greenhouse gas (GHG) emissions, often span multiple departments, supply chains, and external sources, making data consolidation a considerable task.
Standardization issues
Unlike financial reporting, which follows established accounting principles established over many years, sustainability data, metrics and definitions lack uniformity across entities, complicating comparison and benchmarking.
Manual processes and compliance risks
Many organizations still rely on spreadsheets and manual inputs, increasing the risk of errors, inconsistencies, and non-compliance.
Addressing these challenges requires strategic investment in robust IT infrastructure and advanced technologies that streamline data collection, enhance accuracy, and support compliance. These complexities are further amplified when the reporting entity is a group comprising multiple subsidiaries across diverse industries and jurisdictions, each subject to distinct regulatory requirements.
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