Position Green recently outlined the key requirements and the importance of data management systems for ESRS data quality.
The Corporate Sustainability Reporting Directive (CSRD) has ushered in a new era for sustainability reporting, substantially increasing both the qualitative and quantitative data required.
To align with the European Sustainability Reporting Standards (ESRS), companies must ensure their sustainability statements meet five core qualitative characteristics: relevance, faithful representation, comparability, understandability, and verifiability. This influx of data demands rigorous standards to influence the strategic decisions of an organisation.
Drawing from the well-established financial reporting sector may offer valuable insights into achieving verifiability within the ESRS framework, as current guidelines are sparse. Financial bookkeeping principles suggest a host of best practices including transparent record-keeping systems, accurate and precise information recording, comprehensive transaction documentation, and robust information storage to prevent unauthorised alterations. Continuous and legitimate record-keeping that demonstrates the occurrence of reported events is pivotal.
Utilising a dynamic data management system is instrumental in streamlining sustainability reporting and verification. Position Green’s software exemplifies this by offering a suite of features designed to ensure data integrity, provide activity log traceability, secure data storage, and continuous system updates in line with evolving requirements. Its integration with existing financial systems and user-friendly interface for auditors and stakeholders simplifies the complex process of sustainability reporting.
The concept of double materiality in ESRS entails conducting a thorough assessment that fulfils all qualitative characteristics, with a focus on verifiability. Engaging an assurance service provider early in the process is crucial to avoid overlooking material topics and disclosures. Comprehensive documentation of this assessment, including the rationale behind excluding certain topics, is invaluable for an efficient assurance process and forms a solid foundation for future assessments.
In summary, thorough documentation of the double materiality assessment and stakeholder engagement details is not just best practice—it is a necessity for presenting credible, verifiable sustainability reports. By inviting assurance providers into the process early and maintaining meticulous records, organisations can assure the quality of their sustainability reporting in compliance with ESRS mandates.
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