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Doing responsible reporting: assurance-ready ESG data as the silver bullet

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By Manishankar Prasad

· 4 min read

ESG as data play

A slow revolution is occurring, and ESG data is creating a corporate accountability revolution. With every corporation responding to the climate zeitgeist, a trickle of data is being generated at each asset and aggregated to the enterprise scale. Data creates the baseline and in turn, triggers comparisons, KPIs and benchmarking. Climate reporting initially might be faulty and incremental through dinosaur-era Excel sheets; however, there is a plethora of softwares that assist data to be digitized onto the grid. Another data stream gets embedded in the information circulatory system that is organizations. Carbon data is an ERP data stream, and the carbon footprint is a retail measure of the environmental cost that the consumer can gauge. 

ESG or sustainability is seen as a process for most entities that are adjusting to the new reality. Data is a culture and climate data are a new upgrade to the existing swathe of reporting on the financial side that enterprises must do as a part of their regulatory obligations. The climate era will have its own share of obligations as business as usual is being disrupted with climate shocks in the form of extreme events having the capability of floods, droughts, and cyclones which India saw in Kutch a few months back with Biparjoy. 

The ESG reporting frameworks are a bewildering alphabet soup from ISSB to the grand old sustainability framework, GRI. Each country will have its own variant from the EU CSDD to the desi option in India, the BRSR (Business Responsibility & Sustainability Reporting). During the reporting maze frenzy, more building blocks are being added to the carbon edifice especially human rights which lends valency to the term ‘responsible’. Communities of practice from employees to vendors to customers are all key stakeholders for the company and how their voices are embedded in the decision-making, especially from the welfare standpoint is the key messaging in the human rights & business discourse. Carbon reporting is science-led and thus can be quantified however communities are varied and the diversity of voices cannot be perfectly quantified though the main concerns can be addressed. 

Why ESG data itself is not ‘responsible enough'

This article introduces the term responsible reporting instead of ESG or sustainability reporting as being responsible entails something fundamental, that being ethical should be usual rather than exceptional through the sustainability lens. Often the term sustainable has the sense of being external to the quotidian operations of a business. Being responsible is not institutionalised charity or CSR which is a good step for impact, but often a starting point in the impact journey. Businesses are global entities with massive potential for transformation, in terms of employment generation to support least developing countries with tax revenues.

Biodiversity or Natural Capital Reporting is another pillar in the responsible reporting basket with companies that have a material impact on forests from rubber, and mining to pulp and paper. But a technology company might not have a grave enough footprint on biodiversity. Yet the context for being responsible to its stakeholders in the ‘stakeholder capitalism’ era, Larry Fink’s preferred nomenclature amid ESG culture wars in the United States. 

Piggy banking on the term, stakeholder capitalism - being responsible is at the crux of businesses doing the right thing. As a concept, it is a large tent where different issues can be accommodated from carbon to biodiversity to the community engagement element. A common misconception or error while thinking about various sustainability indicators is often upwards of a hundred such as in the case of an Indian BRSR. Sustainability data is mainstream accounting data with the fresh off-the-press ISSB guidelines which are causing a mini tremor in the global sustainability community. 

Guard rails against greenwashing

Along with the deluge of data regarding ESG, the emergent compliance risk is one of greenwashing. One of the key requirements in defining ‘responsible’ in the reporting realm is not merely in generating the data but in generating the right quality of data which can be verified through assurance. The ESG frameworks from the EU have a built-in assurance requirement and others including the Indian BRSR will follow from the next year with the core indicators. The core indicators of the Indian BRSR framework up for assurance have a bias towards the metrics that are quantifiable, and a data trail can be established.  The omnibus sustainability assurance standard (ISSA5000) is up for discussion, which zooms into the criticality of verifiable sustainability data, as a basis for investor decision-making. 

The shift from simple, basic reporting to responsible reporting will need assurance at its core, as systems that mainstream data integrity make the data stream assurance ready will be needed. The key driver behind any ESG reporting is to evoke trust and transparency to access markets and capital for businesses. Assurance of the ESG reporting data will only add to the trust quotient.

Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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Manishankar Prasad is the Founder of

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