The Hackett Group’s transformative approach, in conjunction with OneStream technology, empowers companies to harness the potential of simplicity, efficiency, and extensibility throughout their environmental, social, and governance (ESG) compliance journey.
Understanding ESG: Environmental, social, and governance (ESG) is a framework to assess the sustainability of companies and countries, with emphasis on climate change, human rights, and adherence to laws.
Why ESG matters: Regulations, revenue opportunities, and moral imperatives are driving ESG’s transformation.
Simplify complexity: Lack of standardization can lead to confusion, but The Hackett Group’s process simplifies the complexity of your ESG reporting.
Unlock your efficiency: Leveraging OneStream technology results in streamlined data management, enhanced data transparency, and strengthened compliance.
In partnership with The Hackett Group and OneStream technology, your organization can gain a powerful ally for navigating the ever-evolving landscape of ESG compliance, facilitating sustainable growth and reinforcing resilience.
In today’s rapidly evolving business landscape, your company likely faces mounting pressures to incorporate environmental, social, and governance (ESG) metrics into your reporting and operations. With emerging and on-the-horizon regulatory compliance, coupled with the growing influence of ESG on shareholder and investor strategies, it’s crucial for organizations to develop robust ESG oversight, data management, and reporting strategies. The first question we ask at The Hackett Group is “Where does your company stand in its sustainability journey?” In this blog post, we’ll explore the importance of simplicity, efficiency, and extensibility in tackling the challenges of ESG compliance, and leveraging the powerful combination of The Hackett Group’s transformative approach and OneStream technology to drive long-term value.
Demystifying ESG: A framework for sustainable business
The term ESG has recently surged in popularity. But what exactly is ESG, and why is it garnering so much attention? ESG is not a new term, having been introduced in a United Nations white paper called “Who Cares Wins” in 2004 and as part of more than 30 years of global sustainability movements, agreements, and constructs. At its core, ESG is simply a framework to assess the sustainability of companies and countries with emphasis on the three factors of climate change, human rights, and adherence to laws.
ESG goes beyond short-term gains and reaches into long-term impacts of sustainability and materiality. Sustainability – , a term we often hear in the context of environmental conservation – takes on a broader meaning to encompass not only environmental factors, such as climate change, but also human rights and adherence to the law. Materiality, on the other hand, focuses on the significant material factors affecting a company’s bottom line – its costs, revenues and capital. ESG strives to align sustainability with materiality to create a holistic approach to business that considers not only profit but also long-term societal and environmental impacts.
Regulations, revenue, and the right thing to do
The “why” behind ESG’s transformation can be distilled into three facets: regulations, revenue and doing what’s right. Regulatory shifts are quickly propelling sustainability reporting from a choice to an obligation. Meanwhile, the revenue aspect unveils how sustainability initiatives have the potential to not only drive cost efficiencies but also attract conscious consumers and investors. However, at its core, ESG is about doing the right thing – for the planet, society and future generations. As these three dimensions converge, ESG is transcending its origins, now driven by legal obligations, financial incentives, and moral imperatives.
- Regulations: ESG has started to gain the attention of regulators as well. New mandates by the European Union in 2023 pave the way for other regions, including the US, to potentially follow suit.
- Revenue: Another powerful, if not the most influential, driver pushing businesses to adopt ESG practices is revenue. As industries witness unprecedented levels of investment centered on carbon emissions, the financial implications of ESG initiatives are becoming increasingly clear. Major investment funds are placing a premium on companies that demonstrate a commitment to sustainability.
- The right thing to do: As businesses grapple with the complex landscape of ESG reporting, a range of challenges and opportunities emerge. The intricacies of data collection, report creation and alignment with business strategy can be overwhelming. Amid these challenges lies a vast opportunity for professionals to step in, offering expertise and solutions to help businesses embrace ESG effectively.
Simplify your level of complexity with ESG reporting.
At present, sustainability reporting standards are still in a process of consultation and/or deliberation and there are various reporting frameworks and disclosure requirements being created concurrently by national, supra-national and international organizations. This lack of certainty and the inherent absence of full global standardization is a major challenge to a multinational organization.
At The Hackett Group, we appreciate that ESG accounting and reporting is new terrain in many ways and we are required to take action now while the ground is still settling. To address this we have tailored our approach to have a dual focus on building the right technology and data foundations for the here and now while also putting in place the right capability to address new requirements as they become clearer in the months and years ahead. In our process, we identify your current and future business environment, validate the vision and priorities to achieve your specific outcomes, and determine the necessary process and technological improvements, data governance and integration with existing systems so that you are compliant in the near term and also future ready for changing requirements over time.
Unlock your efficiency for long-term value and transparency.
The ability to efficiently align and disclose non-financial performance within existing financial disclosure formats is becoming a requirement to effectively communicate long-term value and manage corporate transparency. To accomplish this, we leverage OneStream’s technology and extensibility to create a comprehensive illustration of your company’s impact on the environment, society and governance, and integrate important ESG considerations into your overall business strategy. This alignment not only helps you fulfill regulatory requirements, but improves data transparency, auditability, and the trust required to address shareholder, investor, and societal expectations on sustainment development.
Navigate your ESG journey with The Hackett Group’s OneStream framework.
To navigate the complexities of ESG reporting and maximize its benefits, The Hackett Group utilizes a phased approach to help companies achieve their sustainability goals and objectives. This process is designed to establish the strategy, certification and reporting objectives; consolidate and analyze the data for final mile regulatory and shareholder reporting; and to craft a market and global-level strategy to fully leverage the power of OneStream for ESG requirements. To begin your journey, we can help with a few recommended considerations:
- Stay true to your company culture and business sector. ESG in general can be very confusing with a constantly shifting landscape and evolving requirements. Anchoring your decision process in how you currently do business is an important first step.
- Start your journey with a sustainability framework and strategy. Scope and scale a sustainability reporting framework design to fit your needs. Your planning scope should include: an initial strategy for requirements, objectives, certifications and compliance with the end goal of creating and validating key ESG performance indicators and metrics.
- Source the data. This is easier said than done. ESG data is primarily non-financial in nature and likely lacks standardization; in some cases itmay take considerable effort to inventory your data requirements ahead of setting benchmarks. Step one is to get the data scoped and required for transformation and consolidation.
- Partnering with experts provides mature standards and solutions. The OneStream platform captures and organizes your approach so you can trust your data. Our implementation for desired entity output combined with OneStream’s unique extensibility facilitates auditability and sign off.
- Sustainability is ultimately about achieving ESG targets fully and effective go-forward forecasting of ESG impact. OneStream’s extensive scenario builds, data analysis, and enhanced reporting allows you to analyze your data and establish future ESG requirements. We strive to help you craft a market and global-level strategy to align and link consolidated ESG reporting to existing financial data and disclosures.
Delivering solutions that look simple while mastering the complexities of effective ESG reporting, based on your needs.
Navigating your sustainability journey begins with understanding that increased regulatory requirements and investor interest mean the ESG landscape is growing more pervasive in market activity and daily business functions. As with any investment, you must weigh the risks and opportunities, and determine the scope and scale of the complexities you face. Our goal at The Hackett Group is to provide you with a transformative, technological OneStream solution to simply and efficiently navigate the regulatory and reporting challenges associated with ESG compliance. With our technology as an enabler and its unique extensibility, you can streamline data management to drive sustainable growth and resilience in the face of changing market dynamics.