Industry
Energy, Resources & Utilities
Rebalance the energy equation
Highlights
- While regulatory alignment is important, businesses need high-quality climate data, the foundation of effective climate reporting, and sustainable decision-making.
- A sustainability data model organizes, integrates, and analyzes climate-related data across the business to achieve meaningful outcomes.
- The Chief Financial Officer’s (CFO’s) role in collecting climate data becomes critical. Climate data represents financial risks and opportunities that directly affect long-term value.
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Climate reporting
At COP29 in Baku, the global conversation around transparent climate reporting reached a pivotal point.
The emphasis shifted toward building a more substantial evidence base for climate policies. Transparency in climate data is not just about compliance but about identifying financing needs, unlocking opportunities, and driving meaningful climate action.
Businesses are increasingly recognized as contributors to and key enablers of global climate solutions. But what do they need to meet these expectations?
- A new climate reporting standard?
- Harmonization of the myriad existing standards such as the Global Reporting Initiative (GRI), Taskforce on Climate-related Financial Disclosures (TCFD), Carbon Disclosure Project (CDP), and the International Sustainability Standards Board (ISSB).
We believe the answer lies elsewhere. While regulatory alignment is essential, businesses truly need high-quality climate data. This is the foundation of effective climate reporting and sustainable decision-making. The focus must shift from merely adhering to specific standards to building a robust sustainability data model that can adapt to evolving frameworks, reduce administrative burdens, and enhance the utility of sustainability data.
Climate data
Why focus on climate data? Organizations should prioritize robust data management rather than being overwhelmed by the nuances of every reporting framework.
This approach enables:
- Flexibility: The same data can serve multiple reporting frameworks, allowing businesses to adapt as standards evolve.
- Efficiency: The reporting burden is reduced by focusing on quality data collection and management. Climate reporting has become a by-product of sustainable business operations.
- Interoperability: Businesses can map internal metrics to different standards as needed without starting from scratch.
Good climate data empowers organizations to make sustainable decisions first and foremost, with reporting becoming a seamless outcome of these actions.
The data model
A sustainability data model organizes, integrates, and analyzes climate-related data across the business.
An It enables businesses to achieve meaningful outcomes while supporting operational and reporting needs. Here’s why such a model is indispensable:
- Data integration across silos: Breaks down departmental barriers by consolidating climate data into a unified system. A sustainability data model harmonizes these datasets into a unified structure, ensuring consistency and accuracy and providing a single source of truth.
- Automation and scalability: Manual reporting processes are error-prone and time-intensive. A data model facilitates automation and a relook at KPIs, allowing companies to scale their sustainability efforts efficiently.
- Real-time insights: A well-designed data model enables real-time monitoring of key sustainability metrics, such as greenhouse gas emissions, water usage, or energy efficiency, and provides actionable, latest data to support immediate decision-making.
- Scenario planning and risk management: The model simulates future risks and opportunities tied to climate change, enhancing strategic planning.
- Alignment with reporting standards: Ensures compatibility with multiple frameworks, avoiding redundancy and inefficiencies.
- Investor confidence: Delivers transparent, auditable, and reliable climate data, demonstrating an organization is serious about sustainability and risk management, aligning with increasingly climate-conscious investor priorities.
By championing climate data collection, CFOs enable businesses to bridge the gap between sustainability goals and financial strategy, aligning climate action with profitability and investor demands.
CFOs as custodians
The CFOs’ role in climate data management becomes critical as businesses integrate sustainability into their core strategies.
Climate issues are no longer just environmental. They represent financial risks and opportunities that directly affect long-term value.
CFOs are uniquely positioned to ensure that climate data is:
- Strategically integrated: Aligning climate data with business goals and financial reporting.
- Robust and reliable: Meeting investor expectations with high-quality, auditable data.
- Action-oriented: Turning data into insights that drive profitability and resilience.
By championing climate data collection, CFOs enable businesses to bridge the gap between sustainability goals and financial strategy, aligning climate action with profitability and investor demands.
The AI advantage
Fragmented data and responsibilities across departments are a common challenge.
To overcome this technology, especially AI, plays a critical role by:
- automating data collection and processing
- enhancing data accuracy and scalability
- providing predictive analytics for scenario planning and risk management
- mapping climate metrics seamlessly across multiple reporting frameworks
Integration is key
The future of climate reporting lies not in standardization alone but in creating adaptable, data-driven systems that make sustainability an integral part of business operations.
By prioritizing sustainability data as a product and empowering CFOs to lead this charge, businesses can navigate evolving standards with confidence, reduce the administrative burden of reporting, and ensure sustainable decision-making at their core.
