The focus on corporate sustainability has steadily increased over the last decade, especially in the energy sector. This trend has spotlighted the need among utilities to set measurable and achievable environmental, social, and governance (ESG) goals. And progress toward those goals needs to be backed by transparent reporting frameworks.
Because they serve the public, and in a very visible way, utilities have a unique responsibility to lead in this area. But utilities want to do so as efficiently as possible. Leaders across the industry are looking for ways to leverage existing compliance data to improve their ESG reporting.
The Value of ESG Reporting
ESG reporting has several important functions. First, it helps utilities track performance against their sustainability goals and commitments. It also ensures adherence to current sustainability standards, while giving utilities an opportunity to shape the direction of future regulations. Further, utilities can use ESG reporting as a part of their competitive positioning strategy to attract investors.
Despite compelling benefits, ESG reporting is hard to prioritize. The effort is usually quite time consuming and it requires sophisticated data collection and management capabilities.
Utilities do have one advantage, though. They are already mandated to track and report on data across several areas of their operations. These include: customer energy consumption, infrastructure maintenance, grid performance, and safety monitoring.
That means, a lot of the time, they already have the data they need to assemble effective ESG reports. They simply have to use that data differently.
Leveraging Compliance Reporting to Enhance ESG Communication
There is considerable overlap between the information utilities already collect in order to meet federal regulatory requirements and ESG reporting categories. Utilities can capitalize on this overlap thanks to two emerging factors:
- There has been rapid advancement in digital technology platforms and highly scalable data storage environments.
- Leaders are increasingly committed to the continuous digital transformation of core processes like power generation and customer usage and billing.
This means that most utilities have accumulated a massive amount of useful data. With modern data management tools, this information can be analyzed and visualized to feed reporting on ESG metrics.
Below are just some of the ways utilities can leverage the compliance data they are already collecting to provide greater transparency into ESG strategies and efforts.
- Continuous improvement toward ESG targets: Analyze compliance reporting to spot trends, document areas of improvement, and set future ESG targets.
- Emissions reporting: Consolidate facility-level greenhouse gas emissions data to report on overall climate impact and the steps being taken to reduce carbon footprint over time.
- Resource utilization: Demonstrate the impact of initiatives to conserve water and electricity usage in utility operations.
- Renewable energy compliance: Showcase the impact of commitments to renewable portfolio and clean energy standards
- Community engagement: Use data on community investments, collaboration with civic organizations, educational programs, and local economic development initiatives to report on social responsibility goals.
As the emphasis on transparency and accountability grows in the energy and utilities sector, the need to showcase meaningful, measurable progress toward ESG targets will also increase.
Utility companies that invest in enhancing ESG reporting and communication capabilities will enjoy a number of important benefits, including strengthening relationships with key stakeholders and improved differentiation in an increasingly competitive market.
Looking for new ways to effectively sort through and draw insights from your existing compliance data? Be sure to explore the HData Platform. It was purpose-built for this exact purpose.