Workiva’s Henrik Sandin says his main role is to inform employees and customers of current and future ESG regulation and what impact it will have on employees and products.
The green leader, who has also worked for Deloitte and the Royal Bank of Canada, argues that the more firms become transparent with their sustainable, social, and governance efforts, the bigger the competitive advantage.
Over a coffee, Sandin breaks down what companies need to do to meet their ESG goals over the next year and explains how digital transformation can help as well as mapping out the measures he takes to reduce his own carbon footprint.
What does transparency in ESG data mean in 2024 for sustainability?
The first wave of corporate sustainability reporting directive disclosures will be required in early 2025 for this year’s reporting. The goal of these new measures is to bring transparency to a firm’s position across environmental, social and governance (ESG) issues. This includes what it is planning to do to improve on and meet the targets and goals it has set itself.
It’s crucial that firms have access to accurate data with the right level of detail. Without this data, it’s hard to make relevant, transparent sustainability disclosures, and to build trust with stakeholders. There’s a bit of a ‘chicken or the egg’ issue right now. Companies will need to source new data to be able to report in line with new disclosure requirements.
There may be gaps in available data, but this shouldn’t deter businesses from being ambitious in their disclosures. It’s critical that this is seen as an incremental process, where quality and availability will become better over the coming years.
How can companies benefit from transparent reporting?
With increased transparency, evidenced through assurance and sufficient processes and controls, stakeholders will be more willing to trust what is being disclosed by businesses. This will allow for greater investments, the possibility of discounted funding and ultimately a more favourable position in the market.
In addition to favourable funding, another example is employee engagement — the workforce is already taking these topics into account when choosing where they want to work. Fully transparent sustainability disclosures that can be supported with data-backed evidence means firms can attract and retain talent.
Does digital transformation help with environmental reporting?
It’s no longer possible to manage the sheer volume of ESG-related data through a disjointed process. Technology needs to be front and centre for companies to help them manage the whole process from data sourcing through to audit and disclosure. It’s critical that firms’ IT and data departments are key contributors to parts of any transformation projects currently being undertaken.
Without robust technology aiding businesses’ disclosure process, there will be far more room for unnecessary errors, inaccurate calculations, and misstatements. Gone are the days where one can send around single documents across the organisation to gather input from multiple sources that later gets manually consolidated into the final report.
How can firms use digital technologies such as AI and IoT to ensure transparency?
Internet of Things (IoT) can help with accurate on time data sourcing, giving firms the comfort in their ability to track their current standings against targets and limits continuously.
For artificial intelligence (AI), there are great use cases for it to help companies in their report writing. Indeed, generative AI has the potential to revolutionise the business reporting market by boosting productivity and efficiency and enabling insights that lead to better and faster data-driven decisions. AI can help those who produce complex reports, essentially shifting the job from being that of a content producer to a content editor.
It’s equally important that the output from such processes is subject to human oversight and scrutinised internally before anything is published.
What steps do you take in your day-to-day life to be more environmentally friendly?
I am committed to recycling; it is such an easy step everyone can take to help minimise landfills. My wife and I try to find furniture and similar items second-hand before purchasing something new. I’ve limited my actual purchases quite a lot over the years, which might just be due to getting older and not feeling that I need as much, but this surely helps reduce my footprint as well.
Finally, I also try to take the Eurostar as much as possible, instead of flying and I drive an electric car.
What hopes do you have for the future of the environment?
To help elevate society’s quality of life. By helping companies report on their impact to the environment and society — not just their own operations, but also that of their supply chains — we can gain a better understanding of where governments, innovation, and investments can help further the cause. We can’t completely get away from our reliance on gas, coal, or oil, but by pushing towards greener processes, we can mitigate our environmental impact.
I also believe the social aspect of sustainability is important and deserves more attention. For example, ensuring that people have living wages, identifying when companies are not treating their workforce fairly, and eliminating discrimination to ensure everyone can be themselves, without risk. This will help elevate society, which will, in turn, help elevate the environment.
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