Sustainability improves the image of your company. Brands that are concerned about generating value to society and the planet directly influence the perception of customers and users towards the organization, transmitting trust and confidence to stakeholders. The corporate sector plays a critical role in achieving such goals. Corporate sustainability is a way of managing resources and making them efficient, both for the company, the environment and society. Standardization of ESG Performance ESG (Environmental Social Governance) reporting, also known as sustainability reporting, has become indispensable for listed companies that want to be recognised as ESG investments. However, measurement methodologies and reporting are still far from standardized. The Sustainable Accounting Standards Board, the Global Reporting Initiative, the International Financial Reporting Standards Foundation and countless other organizations have worked to align material performance indicators within industries and sectors.
Therefore, reporting organizations increasingly provide a variety of official frameworks to meet the needs of investors, thus facilitating the comparison of the performance of the options available in the investment market. Frameworks in the ESG universe are systems for standardized reporting and disclosure of ESG metrics. The use of these frameworks is voluntary, however, they may be required on some occasions, for example by a particular investor, client or investment bank. These reporting frameworks are developed by non-profit organizations, NGOs, business groups and other associations. As a result, they vary widely in terms of the areas of focus and the metrics they recommend. The use of a specific ESG framework helps companies to guide their reporting processes by showing where to look, what to measure and how to communicate it. In capital markets, reliable data is the most valuable. Therefore, as the investment community sharpens its focus on ESG metrics, the levels of scrutiny applied to this data intensify. The use of a reporting framework is therefore paramount and helps both companies and investors when disclosing data and comparing information. Understanding Certification Sustainability certificates assure consumers that the product they buy is the same as the one they bought at source, ensuring a positive impact on the environment, on people and communities, and on the development of a more respectful economic model. Natural resource exploitation activities carry high environmental and social risks, especially in developing countries. It is difficult for companies to ensure and prove that the raw materials and products they buy have not been subject to bad practices such as environmental or labor overexploitation, or that the rights of local populations have been violated. Sustainability certificates work to provide companies and consumers with this certainty. They are usually managed by independent organizations, mainly NGOs and non-profit organizations, which ensure impartiality, honesty and the defense of the interests of the weakest. However, the challenge of sustainable procurement is as big a coordination problem as that of standardized ESG indicators. Consider the following: 1000+ standards now exist asserting product, facility, and company sustainability claims, increasing the perception that sustainability investments are monetizable. As a result, companies will need to prepare for the mainstreaming of sustainable procurement due to increased regulations pushed by the ESG Industry, as well as risk mitigation.
Data Composition and Collaborative Transaction Certificates By far the biggest challenge today is the lack of composability of data when it comes to sustainable certification. The trend for supply chains to declare themselves as sustainable is on the rise. Logistics and transport are putting their environmental performance under the microscope to gain competitive advantage, build customer loyalty and stay ahead of international legislation. However, at present, quantitative parameters that would allow companies' sustainable activity to be measured externally and independently of the information provided by the companies themselves are practically non-existent. The solution is transaction certificates. All marketing of organic products, whether at the national or international level, must be accompanied by a transaction certificate (TC), which clearly demonstrates the origin and volume of the marketed product. The certification body controlling the trader attests to the organic status of the product to the buyer by means of the TC. This certification would define the transaction between the buyer and seller, as well as certify which facility the product comes from, and what sustainable standards it meets. Transaction certificates are critical to sustainable procurement because they track how a sustainably produced good moves through the supply chain, forming the basis of most Chain of Custody standards. By providing transaction certificates, companies will be able to prove that their goods meet the appropriate criteria that correspond to their sustainability story.