2024 and beyond: Navigating a new sustainability reporting landscape
Most companies are now reporting on climate risk. The 2023 Status Report from the Task Force on Climate-related Financial Disclosures (TCFD) found that 58% of the world’s listed companies are now reporting in line with five or more recommended TCFD disclosures—up from 18% in 2020. At Kin + Carta, we are no exception; we completed our most rigorous sustainability reporting to date in our FY23 annual report as well as our first double materiality assessment. However, there is much further to go, and governments and regulating bodies around the globe are increasing the sustainability responsibilities organizations face.
The much-politicized, much-anticipated SEC climate disclosure regulations in the US just passed vote by US regulators to require company disclosure on climate risks for the first time. Under these new protocols, which will ultimately be viewed in the same stringent light as existing financial regulations, publicly listed companies will be required to include certain climate-related disclosures in their statements and reporting processes.
In Europe, the “double materiality” assessments featured in the upcoming European Sustainability Reporting Standards (ESRS) will strengthen climate impact reporting requirements, while UK Sustainability Disclosure Standards are expected to roll out in July 2024.
Over and above each of these regional milestones, the global ISSB Standards framework is progressing at pace. This means that maturing an understanding of climate disclosure reporting, past compliance, and modeling for risk, resilience, and innovation is one of the most important tasks for senior management in 2024.
Identify your pain points
Sustainability strategy and tracking progress against targets is complex enough to keep business leaders up at night. It was the third biggest source of anxiety in our 2024 Leadership Priorities in Tech report. And 39% of executives said their worries around sustainability were rooted in a skills gap.
So, how can you start to overcome these challenges?
- Mandate collaboration between your sustainability, finance, and risk functions to shift sustainability from being an externality to a material cost of doing business—in the same way that employee upskilling and data protection are.
- Strive for progress over perfection; momentum matters most. While modern data-led thinking means that 100% accuracy is the default, for less mature teams or organizations, 75-80% accuracy with the balance as a proxy or estimate can be an empowering and, indeed, a respected place to start.
- Evaluate your tools, platforms, and investments in the context of your full value chain (from clients to suppliers). This ensures your suppliers, clients, and disclosure requirements are all taken into account.
All roads lead to data
Digital transformation, data, AI transformation, and now sustainability transformation are interlinked and complex transformations for organizations to navigate. While sustainability expertise is important in achieving sustainability objectives, strong data foundations are arguably more critical. What gets measured gets managed and, without organized data, large organizations can’t measure and report on their sustainability progress in a meaningful way.
By working with partners with knowledge and expertise in this space, businesses can mitigate new forms of regulatory risk while enhancing and protecting economic value for the long term. That’s why our language and approach at Kin + Carta have matured to that of “data-driven decarbonization”—reflecting how we are operationalizing sustainability with and for our clients.
A sustainable future
More and more organizations are making sustainability part of their strategy. The Reuters IMPACT: Global Sustainability Report 2023 found that nearly 80% of survey respondents expect sustainability-related investments to increase in the next three years. While 85% of respondents said that data analysis solutions were effective or very effective sustainability technologies.
It’s a trend we see across our business. At Kin + Carta, we actively support our clients and partners to develop and implement solutions that help them practice sustainable behaviors and work towards planet-friendly goals. From building an app to help small and medium-sized businesses to receive personalized climate action suggestions to supporting a public sector department in developing its sustainability strategy, our work demonstrates the intersection of technology, data, and sustainability. We’re also one of Microsoft’s most trained partners in implementing the Microsoft Sustainability Manager (MSM)—a tool that unifies data intelligence to help organizations monitor, manage, and accelerate sustainability performance. Our strong sustainability expertise was recognized in 2023 when we were named Sustainability Changemaker Microsoft US Partner of the Year.
Want to know more about how we use business as a force for good? Explore the findings from our 2022/23 Impact Report. Or explore our data and AI services to find out why data is key to delivering on your sustainability goals.