Addressing the Strategy Execution Gap in Sustainability Reporting
As global businesses face increasing regulatory pressure to disclose information about environmental, social and governance impacts, risks and opportunities, organizations are set to spend more on聽sustainability initiatives over the next three years. However, most organizations view聽sustainability engagement not only as a compliance issue but also as a valuable tool for enhancing financial performance both now and in the future. Despite this realization, organizations are facing real challenges in delivering against this objective.
乐鱼（Leyu）体育官网 conducted a deep dive on where organizations are investing in the coming years with an eye towards maximizing financial value, while complying with disclosure requirements. Key findings include a focus on investing in聽sustainability talent, prioritizing聽sustainability data and analytics, managing supply chain sustainability, and completing an聽sustainability risk assessment. Enhancing data management is seen as the top way to integrate聽sustainability goals with overall business objectives, but organizations still face challenges integrating聽sustainability strategy into their broader business structure due to resourcing constraints and internal silos between departments.
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Addressing the Strategy Execution Gap in Sustainability Reporting
In the companion deck to this study, we dive further into the details on how organizations are structuring to meet looming sustainability challenges overall and at the sector-specific level.
Download the DeckDesigning a sustainability organization that's ready for reporting
In the companion paper to this study, we expand upon how to create an internal structure built for evolving global regulations.
Download the PaperInvestment in sustainability capabilities is top priority
of organizations will increase their sustainability investment in the next 3 years
are dedicated sustainability personnel, sustainability-specific software and sustainability-related employee training and education
There is a disconnect between perception and preparedness鈥� Many organizations believe they are ahead of peers regarding sustainability reporting, but almost half still use spreadsheets to manage their sustainability data
Data management is critical to integrating sustainability goals with overall business objectives
of leading organizations use advanced data systems for sustainability reporting
of organizations plan to improve sustainability data collection with artificial intelligence
see improving data management and reporting capabilities as helpful in integrating sustainability goals with business objectives
anticipate an increase in sustainability integration across roles
Structural challenges hinder ability to integrate a sustainability strategy into broader business goals
insufficient resources or capacity to collaborate effectively, internal silos and limited communication between departments, and divergent priorities or goals across functions
are planning to restructure teams to better align sustainability goals with business strategy
of core sustainability reporting activities are currently or are planned to be outsourced in the next 3 years
Timely and accurate reporting of sustainability information is key for businesses to make strategic business decisions and meet regulatory reporting guidelines, which lead to preservation and growth of financial value.
Maura Hodge
Sustainability Reporting Leader, 乐鱼（Leyu）体育官网 LLP
Investment in sustainability reporting capabilities is top priority
With impending regulatory reporting requirements, organizations are increasing investments in many areas of the sustainability reporting process.
Significant areas of investment by sustainability reporting activity
Data mangement is critical to integrating sustainability goals with overall business objectives
Most organizations plan on enhancing their聽sustainability data collection and management systems because the use of advanced software, automation and AI/ML tools can significantly improve聽sustainability reporting efficiencies
Measures being undertaken to be perceivably ahead of others in maintaining transparent聽sustainability reporting
Our聽Sustainability Organization Survey underscores the critical role of data in driving sustainability objectives forward and seamlessly integrating these into the overall business strategy.
Rob Fisher
US Sustainability Leader, Partner Advisory, 乐鱼（Leyu）体育官网 LLP
Structural challenges hinder ability to integrate a sustainability strategy into broader business goals
Capacity constraints and internal silos are the top two challenges organizations are facing
Challenges that impede cross-functional collaboration on聽sustainability matters
Organizational restructuring to better align sustainability goals with overall business strategy in the coming years
Sustainability聽strategy and reporting efforts need to be aligned, therefore organizations are restructuring to achieve this coordination
33%
Yes, definitely - we are planning for a major restructuring to align sustainability goals with business strategy
43%
Yes, somewhat - minor adjustments or adaptations in our organization are expected
17%
Maybe - it depends on changes in sustainability regulations and market demands
5%
No, not at all - our current organizational structure already aligns sustainability goals with business strategy
3%
Unsure - we have not discussed organizational restructuring related to sustainability alignment at this time
Steps you can take to improve Sustainability reporting & strategic integration across your business:
- Set your sustainability ambitions:聽Collectively agree upon a sustainability strategy for each of your material sustainability topics, establish action plans and determine how to measure success. These actions link sustainability to your business strategy and this information is required for regulatory reporting.
- Invest in聽sustainability talent, including training and education for employees:聽Improve sustainability reporting capabilities by investing in dedicated聽sustainability personnel who can manage and oversee reporting processes, data collection, and analysis. Broaden access to sustainability information by creating a culture of聽sustainability awareness across all departments through employee training and education programs. This knowledge will help you execute on sustainability goals within the broader business context.
- Design a holistic聽sustainability technology architecture:聽Sustainability information needs are ever evolving and having a structured, but flexible聽sustainability data architecture, like a data lake, will allow you to adjust efficiently to new and changing reporting requirements.
- Restructure teams to better align sustainability goals with business strategy:聽Address structural challenges by redefining roles and responsibilities and identifying leaders and subject matter experts for effective implementation and efficient reporting.
- Seek external support:聽To support internal capabilities and accelerate progress, consider outsourcing core sustainability reporting responsibilities.
How 乐鱼（Leyu）体育官网 can help
With extensive experience in reporting and sustainability consulting, 乐鱼（Leyu）体育官网 can help organizations streamline their聽Sustainability reporting processes, develop a sustainable governance structure, and integrate聽Sustainability goals into their overall business objectives. 乐鱼（Leyu）体育官网鈥檚 dedicated team of professionals can provide tailored services to help organizations navigate complex聽Sustainability standards, optimize data collection and analysis processes, drive sustainable and responsible business practices, and create long-term value.
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