Driving Impact With Disclosure Director: Reflections From Benchmark's Annual Customer Conference

At the 2022 Benchmark Gensuite® Impact Conference earlier this year, we had the opportunity to hear from our subscribers; a chance to learn from their successes, examine their challenges, answer their questions, and otherwise elevate best practices in Environmental, Social, and Governance (ESG) performance data management and reporting.

In the words of Benchmark founder and CEO R Mukund, the unique experiences and insights our esteemed attendees shared during this multi-day gathering ”underscored the ethos of our shared objectives and our efforts toward them.” The week was filled with encouraging stories shared by the conference’s attendees, whose use of dedicated, cloud-supported ESG data management and reporting platforms have strengthened their cost-savings, operational resilience, investor relations, and, of course, regulatory compliance outcomes.

Even still, our subscribers and customers made clear their preoccupation with one imminent challenge in particular: the U.S. Securities and Exchange Commission’s (SEC) proposal to require that public companies file standardized disclosures of their climate-related financial risks.

For the Benchmark team, this nearly universal concern among our partners was especially resonant. And we remain committed to not only guiding our partners through the ever-changing landscape of voluntary and mandatory ESG disclosure frameworks, but working to ensure that this landscape advantages, rather than burdens, our partners’ efforts. 

To that end, we strive to equip our subscribers and customers with the tools and resources they need to confidently execute and, whenever necessary, adapt their ESG performance measurement, management, and reporting processes.

This is the impetus behind Benchmark Disclosure Director

As demonstrated during a dedicated session at Impact 2022, recapped below, our premier ESG data management and reporting solution has been designed and developed with the present and anticipated needs of our subscriber community top of mind. Following the completion of a successful subscriber-driven pilot program, Disclosure Director is today a robust, capably adaptable platform that, as our charter subscribers would attest, is proven capable of enabling enterprise end-users to set, pursue, achieve, and, ultimately, exceed their unique ESG performance excellence and reporting objectives.

Disclosure Director – Indispensable at Every Stage of the ESG Journey

Identifying Relevant ESG Risks & Developing a Management Strategy:

The materiality assessment, conducted at the outset of any durable enterprise ESG program, is critical. It’s here that engagement with your internal stakeholders, from EHS and HR leaders to FP&A, accounting, and procurement personnel, will yield a baseline of inbound sustainability risks and opportunities for mitigation that have a measurable bearing on financial performance. 

Moreover, the input of these internal stakeholders will be contextualized with the feedback of their external counterparts—investors, lenders, insurers, suppliers, and regulators—which will be used to begin assigning priority to the company’s “financially material” ESG-related risks.

The next step in the corporate ESG journey is strategy. Presuming the company’s executives will have both a quantified appetite for risk and a dedicated budget for accommodating it, the points of convergence between the ESG issues prioritized by internal and external stakeholders will chart the subsequent management strategy. 

Setting ESG Performance Targets & Selecting the Appropriate Disclosure Framework:

If you’re reading this, you’re no doubt familiar with the adage “what gets measured, gets managed.” And the materiality assessment and subsequent strategy origination may, indeed, lay the foundation for ESG performance measurement. 

However, effectively managing that performance to accommodate stakeholder expectations and serve the bottom line requires ESG program administrators and their colleagues to set bold, clearly defined goals. ESG performance excellence, after all, is a function of progress.

To that end, business leaders and their ESG program administrators must first apply decision-useful KPIs to the ESG issues prioritized in the previous stage. For direction, these persons would do well to examine the KPIs itemized by third-party standard-setting organizations as necessary inputs for ESG performance disclosures.

While there are several commonly used and widely accepted reporting frameworks, it’s crucial that business leaders align their KPI selection and, later, their reporting competencies with the framework that best reflects their targeted ESG performance outcomes. 

For starters, there’s the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB), whose voluntary frameworks widely apply to comprehensive corporate ESG performance reporting. Otherwise, there’s the CDP (formerly Climate Disclosure Project) and the Task Force on Climate-Related Financial Disclosures (TCFD), whose frameworks are decidedly focused on the disclosure of environmental impact, such as GHG emissions reductions. 

This, of course, is where too many would-be stewards of ESG performance excellence fall into trouble. Adding to the confusion of this so-called “alphabet soup” of voluntary ESG reporting frameworks is their dynamism; the organizations behind these frameworks and their attendant KPIs are regularly updating and refining their guidance, thus changing the reporting needs of companies. More still, the global proliferation of mandatory disclosure frameworks, including the aforementioned action of the SEC, introduces another layer of complexity.

Effectuating ESG Impact Through Automated Data Collection, Management, Analysis & Reporting:

For business leaders, it’s the effective operationalization of their stakeholder-influenced ESG performance management strategies that makes or breaks their goals. Specifically, executives and their ESG program administrators need reliable, continuous insight into their ESG performance across the enterprise, the capacity to identify and anticipate points of failure, and the ability to provide evidence of their ESG performance outcomes to the necessary stakeholders.

To accomplish this, business leaders must choose whether they put the onus on their designated ESG KPI owners to use emails and manual spreadsheets to assemble, store, analyze, and report the outcomes in their charge, as most of large U.S. companies tend to do.

The alternative? Equipping their designated KPI owners with a cloud-supported, remotely accessible, multi-functional, and adaptable ESG performance data management and reporting platform. This, in turn, will maximize efficiency, minimize the risk of human error and delay, and enable seamless reporting to internal and external stakeholders.

The second of these pathways is clearly superior. Because whether it’s enterprise leaders or the junior employees tasked with overseeing the achievement of discrete ESG performance goals, an ESG program capable of delivering continuous bottom-line results is one that’s comprehensively holistic.

Learn more about ESG Director and request a demo with our expert team today!