HOW AND WHY YOU SHOULD INCLUDE MORE NON-FINANCIAL DATA INTO YOUR ACCOUNTING (ESG)
“… bookkeeping is not just about keeping books, or recording profits and losses. It’s about the business’s own narrative. That narrative maintains the integrity of the business itself and its connection to the world.”
– Dan Palanza
In this post we look into how to make better data for ESG-reporting.
“Investor engagement, regulation, and societal expectations are driving increasing awareness and action on environmental, social, and governance (ESG) performance. These drivers challenge organizations and their chief financial officers (CFOs) to enhance reporting and disclosure, and address ESG factors as an everyday part of decision making.“
“But how should organizations provide meaningful and specific disclosures for ESG issues? …”
– 2014 by Stathis Gould for International Federation of Accountants
HOW DO YOU COMMUNICATE HOW YOUR ORGANIZATION CREATES SUSTAINABLE VALUE IN 2021?
Do your stakeholders really trust all your metrics on sustainability?
How can your ESG reports be trusted?
Bookkeeping is about the business’s own narrative. The story can be told in dollars, but for ESG-reporting the story is also told in non-financial figures. A problem arises if the figures and ratings that the story is leaning on are subjective.
“Financial data” refers to an amount of a currency, for example US Dollar.
“Non-financial data” refers to a product number, quantity of a product, miles driven, hours spent, litres of fuel, locations, timestamps, etc.
During audit, the non-financial data can provide good analytics. However, it is often more work to measure, record, access and use. Why confidence in Non-financial information is also a widely known problem.