Consultancy workload, budgets allocated and market trends
Currently, there is a sky-rocket demand for Environmental Social and Governance (ESG) consultancy services, driven by investor pressure for companies to disclose ESG risks and opportunities. According to a survey conducted by the consultancy ERM, demand for ESG services increased by 70% between 2017 and 2019. A report by Verdantix estimated the ESG reporting market value at $1.3 billion in 2021, with expected CAGR of 18% to reach $4.1 billion in 2027. This is only one of 5 segments of overall ESG-related market services, which are expected to reach a total value of $16 billion in 2027.
There has been a noticeable shift in recent years from Environmental and Social Impact Assessment (ESIA) to ESG services, as companies seek to enhance their non-financial reporting and disclosure practices. A survey by PwC found that 83% of investors now consider ESG factors when making investment decisions. In a separate survey by BSR, 90% of sustainability professionals said that ESG factors were "very" or "extremely" important to their company's strategy. Bloomberg Intelligence reported that ESG assets reached $35 billion in 2020, while they estimate they will grow above $50 billion in 2026 (see Figure 1.)
Figure 1. ESG assets under management (AUM), actual from 2014 to 2020, and projected until 2026, with distribution between regions. Source: Bloomberg Intelligence, 2021.
This has resulted in an increase in the number of ESG specialists, companies offering ESG services, and projects integrating ESG considerations. Consequently, ESG consultants may have larger workloads and more significant budgets allocated to them than ESIA experts. However, the demand for ESIA services remains strong, particularly in emerging markets where new infrastructure and development projects (i.e. mining, oil and gas) are being planned. For example, according to the consultancy ERM, demand for ESIA services increased by 30% between 2017 and 2019, with a significant increase in demand from infrastructure developers. A report by Verdantix estimated the global ESIA consulting market is worth $1.4 billion in 2018, though other sources predict higher numbers. For instance, a report by Environmental analysis, states that impact assessment accounts for 20% of the total environmental consultancy market valued at $38 billion in 2020 (Figure 2).
Figure 2. Distribution of environmental consultancy market by regions and segments. Source: Environmental Analyst, 2021
Expected changes in the future
It is expected that the demand for ESG services will continue to grow, driven by increasing regulatory requirements and investor pressure. There is a growing expectation that ESG will become more integrated into mainstream business practices, with greater emphasis placed on measuring and reporting on non-financial performance (data driven) metrics. This will require a shift in the way companies and practitioners approach sustainability management. An article by Deloitte predicted that ESG reporting will become "more detailed, more transparent and more consistent" in the coming years. The same report found that the use of digital tools and software for ESG reporting and analysis is expected to increase, with a particular focus on using machine learning and natural language processing to analyze large volumes of data.
In terms of ESIA, there is expected to be a continued demand for services in emerging markets and for projects in environmentally sensitive industries. For example, a report by the International Energy Agency predicted that the demand for ESIA services will continue to grow in the renewable energy sector. As such, it is likely that many consultants and companies will continue to offer both ESG and ESIA services, or a combination of the two.
What are the main differences between ESG and ESIA? How much do they overlap?
While both ESG and ESIA are related to environmental and social factors of investments, there are some key differences between the two. ESG refers to a set of criteria that investors use to evaluate the long-term sustainability and ethical impact of a company or investment. ESG criteria include factors such as a company's carbon footprint, labor practices, board diversity, and other social and environmental considerations. Thus, ESG analysis typically covers a wide range of issues related to sustainability, but may not go into great depth on any issue.
ESIA is a process used to identify, predict, and evaluate the potential environmental and social impacts of a proposed project or development. ESIA is typically conducted as a requirement for obtaining permits, approvals or lender decisions for a new development. The analysis goes into greater depth for a wide range of factors, including impacts on biodiversity, land use, cultural heritage, and local communities. ESIA is determined by the location and the community where new development is to be realized.
According to a survey by the Global Association of Risk Professionals (GARP), ESG professionals typically have a background in finance (27%), sustainability (26%), or corporate social responsibility (13%). In contrast, ESIA specialists often have backgrounds in environmental science (43%), engineering (14%), or social sciences (12%).
Data collected and methods for impact identification and evaluation
ESG is typically focused on the data provided by the company or investment being evaluated. This includes company reports, financial statements, and other public data sources. ESG analysis may also include external data sources, such as third-party rating agencies or industry reports. Analysis typically uses a qualitative approach to evaluate the potential impact of a company or investment. This may include evaluating the policies and practices of the company or investment, as well as its performance on key sustainability metrics.
ESIA, on the other hand, requires a broader range of data to be collected. This includes environmental data, such as air and water quality measurements, as well as social data, such as demographic information and stakeholder interviews. The data collected for an ESIA is typically more specific to the project being assessed and may require specialized monitoring equipment or surveys. It may also use quantitative and predictive models or other tools to identify potential impacts and evaluate its significance on local communities or ecosystems.
Results and reports
ESG analysis typically results in a score or rating for the company or investment being evaluated. One of the popular ESG scoring approaches is illustrated in Figure 3. The score may be used to compare the company or investment to its peers or to evaluate its progress over time. ESG reporting is typically done using standardized reporting frameworks, such as the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB).
These frameworks provide companies with guidelines for reporting on their sustainability performance and require the disclosure of specific information, including the use of key performance indicators (KPIs) and metrics. Reports are often integrated into a company's annual report or provided as a separate report. ESG reports can vary in depth and length, depending on the company or investment being evaluated and the reporting framework used. In some cases, the reports may be only a few pages in length and provide a high-level overview of the company's performance.
Figure 3. Environmental, Social and Governance factors and score distribution from Rafinitiv. Source: Thomson Reuters Rafinitiv ESG scores
ESIA on the other hand, typically involves the preparation of an Environmental and Social Impact Assessment Report or Statement (ESIAR or EIS) or a similar document. The ESIAR is commonly prepared in accordance with the requirements of the lender, regulatory agency or authority responsible for approving the project. A report provides a detailed description of the proposed project, its potential environmental and social impacts, and the measures proposed to mitigate those impacts. This report is used by regulators and other stakeholders to evaluate the project and make decisions about its approval or implementation. Thus, ESIA reports are usually much longer and more detailed and can have hundreds or even thousands of pages in length.
Stakeholders engagement levels and accountability
ESG usually involves some level of stakeholder engagement, such as consultation with employees, customers, investors or other stakeholders. However, the level of engagement may vary depending on the company, specific issues being addressed, and the used reporting framework. Companies are held accountable for their ESG performance, but there is generally no formal mechanism.
ESIA, on the other hand, typically involves a much higher level of stakeholder engagement. The engagement may include public consultation, stakeholder interviews, and the formation of advisory groups to provide input into the assessment process. The input of stakeholders is often a key factor in the decision-making process. Furthermore, decisions may be legally challenged or appealed.
Both ESIA and ESG are being criticized by different groups. What are the key issues and challenges?
Major deficiencies in objectives, procedure and standards
One of the major challenges in both ESG and ESIA is the lack of coherent standardization and consistency in the procedures and methodologies used. This often leads to discrepancies in data collection, analysis, and reporting, making it difficult to compare results across different projects or companies (further read in Sustainalytics text). Analysis done by Schroders demonstrated considerable differences between ESG ratings (low correlation) obtained by widely-used methods, as presented in Figure 4.
Figure 4. Low correlation (agreement) between different MSCI, Sustainalytics and S&P ESG ratings. Source: Schroders analysis, 2021
Additionally, there is a lack of clear guidelines and regulations governing the ESG and ESIA processes, which can lead to confusion and uncertainty for companies and practitioners. An article from Harvard Business Review also points out that ESG data is often self-reported, voluntary and subject to greenwashing or manipulation. The authors contend that ESG investing is a form of corporate social responsibility (CSR) that distracts from the root causes of inequality, injustice and ecological crisis. They also question the evidence that ESG investing leads to superior long-term performance.
ESIAs are sometimes regarded as biased. The source of bias is usually specialists' subjective judgment and descriptive nature of assessments. The bias can be intentional or unintentional, but the line between bias and manipulation may be unclear. Emerging empirical evidence has suggested that assessment studies are likely to be influenced by corrupt practices including bribery, collusion and conflicts of interest.
Some critics assert that ESIA is too rigid or static in their design and implementation, which limits their ability to cope with changing circumstances, or unforeseen consequences, also including the emerging climate crisis and responses.
Important challenges for the process of impact evaluation
Evaluating the impact of a project or company on the environment and society is a complex process, and there are several challenges that can arise in identifying and measuring the full range and significance of impacts. This is due in part to the difficulty in quantifying the impact of intangible factors like reputation and stakeholder trust, particularly in ESG.
The overall quality of ESG ratings is also under question. Recently, criticism and doubts about the rigor of rating approaches have been amplifying. A 2023 survey and report (ESG ratings at Crossroads) by ERM observed that most surveyed investors and companies do not have high confidence that ESG ratings accurately reflect sustainability performance. They provide a list of recommendations for different stakeholders — raters, investors and corporates. Recent survey published by the European Commission demonstrated that vast majority of interviewed stakeholders (84%) think ESG ratings market is not functioning well, and that the EU needs to intervene / regulate it (94%).
Figure 5. Survey results on functioning of ESG ratings in IEEFA market. Source: European Commission 2022
Additionally, it can be difficult to establish cause-and-effect relationships between actions and the impacts observed, which is especially the case in ESG. This can also be a challenge for ESIA, due to the complexity of natural systems and the difficulty in predicting the long-term effects of projects. Some critics contend that ESIA studies are too narrow or fragmented in their scope and methods, which fail to address the cumulative, synergistic, or indirect impacts of projects.
Furthermore, for ESIA, there are no standardized methodologies, which can lead to inconsistent and incomplete assessments. Our previous blog article discusses the possible reasons for absence of standardized methods for ESIA impact evaluation, and proposes the ways to derive and adopt them.
Crucial issues for efficient and effective reporting
Reporting is a critical component of both ESG and ESIA, but there are several challenges that can make it difficult to produce accurate, reliable, and useful reports. These challenges can include issues with data quality and availability, difficulties in presenting complex information in a clear and understandable way, and challenges in identifying the most relevant information for different stakeholders.
ESG reporting can be tedious and expensive for companies, particularly those with limited resources. Additionally, there is a lack of consistency in reporting requirements and frameworks, which can make it difficult for investors and stakeholders to compare data across different companies. ESIA reporting is even more time-consuming, with very long reports and thus costly for developers.
Problems in decision-making and stakeholders acceptance
One of the main objectives of ESG and ESIA is to support decision-making processes and ensure that the needs and concerns of all stakeholders are taken into account. However, there are common hurdles for achieving the goals. For example, decision-makers may not have technical expertise for full understanding of the potential impacts of a project or company, or may not have access to the most up-to-date and accurate information. Similar can be the case for the wider public and citizens, which can lead to a lack of trust and legitimacy of approvals. Additionally, there can be conflicts between different stakeholders with different interests and priorities, which can make it difficult to reach a consensus.
For ESG initiatives, companies may face difficulties in making decisions, particularly if they require significant resources or changes in company culture. Some companies may be hesitant to implement best practices in ESG due to concerns about cost or perceived lack of benefit to the bottom line.
Project developers may face difficulties in getting approval for development projects through ESIA, particularly if they are located in environmentally sensitive areas or if they require significant infrastructure changes. Many members of the public may not understand the importance of ESIA or how to engage with project developers on these issues. Technical experts may overlook key information that local citizens or communities can more easily identify due to their proximity to the affected areas and greater stake in the outcome. Subsequently, public involvement is usually limited or non-existent, especially in developing regions.
What are the statuses and trends for regulation and standardization in ESIA and ESG?
Mandatory / legal requirements
ESIA has been a legal requirement for certain projects and activities, and it is typically required by national and/or international laws and regulations, for decades already (in some countries, like the US NEPA over 50 years). The requirements for ESIA can vary depending on the jurisdiction, but in most countries worldwide they typically include some level of environmental and social impact assessment, as well as public consultation and disclosure. The regulations and laws in many countries have not changed substantially in this century, except for minor changes - EU Directive amendment 2014, US NEPA updates in 2020 (mostly reductions / narrowing). The UK authorities announced major changes in EIA that are now under lively public debate (change to Environmental Outcomes Report).
On the other hand, ESG reporting is not yet mandatory in most jurisdictions, although this is changing. For example, the EU has adopted a comprehensive framework of new regulations and reforms to promote sustainable finance and reporting, such as the EU Taxonomy Regulation, the Sustainable Finance Disclosure Regulation, the Non-Financial Reporting Directive, and the Corporate Sustainability Reporting Directive. The EU is also developing a set of mandatory sustainability reporting standards for companies, based on a consultation launched in June 2023.
Similar requirements are being considered or implemented in other parts of the world as well, as depicted in Figure 6. In the US there is still no formal regulation, although the Securities and Exchange Commission (SEC) has issued guidance on how public companies should disclose material ESG risks and opportunities in their financial filings. Additionally, some states have enacted or proposed legislation on ESG reporting, such as California’s Climate Corporate Accountability Act4. The UK has implemented several policies and initiatives to enhance ESG reporting, such as the Streamlined Energy and Carbon Reporting (SECR) policy, the Task Force on Climate-related Financial Disclosures (TCFD) alignment, the Green Finance Strategy, etc.
Figure 6. ESG regulations status and a roadmap, across the globe. Source: Climatiq, 2022
Standards from financial, non-governmental organizations, and professional associations
ESIA has been around for much longer than ESG reporting, and there are more established general standards and guidelines for ESIA. As a result, there is a higher level of standardization and adoption of ESIA than of ESG reporting. Some of the key ESIA frameworks and standards include the International Finance Corporation (IFC) Performance Standards, the Equator Principles, and the World Bank's Environmental and Social Framework.
Figure 7. Overview and overlap of ESG and ESIA standards and frameworks. Source: Global Reporting Initiative (GRI), 2022
However, there is an increasing number of ESG frameworks and standards (see Figure 7). For example, some of the key ESG frameworks and standards include the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Financial Disclosures (TCFD), and the Principles for Responsible Investment (PRI).
Expected developments regarding regulation
Apparently, there is a growing trend towards greater regulation of ESG reporting (see Figure 6), as policymakers around the world recognize the importance of ESG factors for sustainable economic growth.
More importantly, there is a need towards greater alignment and harmonization of ESG reporting frameworks and standards, to make it easier for companies and investors to compare and benchmark ESG performance across different companies and sectors. The intention is also to avoid misuse and greenwashing.
For ESIA, there is also a strong need for greater standardization and harmonization, as international organizations work to develop common approaches and guidelines for assessing and managing environmental and social risks and impacts, which is still lacking (elaborated above and in our previous article).
Overall, both ESG and ESIA are likely to become more regulated and standardized in the coming years, to reflect on expectations coming from investors, the wider public, as well as from many companies.
ESG is far ahead of ESIA in using digital technologies. Why? What are examples of software use?
Tools for collection of data and use of external databases
ESG and ESIA both use a variety of tools for data collection, including surveys, interviews, and questionnaires. ESG, however, relies heavily on the collection of company-specific data, often using internal systems and databases to gather information on sustainability metrics and ESG performance. ESG also widely uses external databases for gathering information, such as stock market reports, financial data, climate data, and social media analytics. Some of the software examples are Bloomberg Terminal, ESG Enterprise (Figure 8), MSCI ESG Manager, Refinitiv ESG Data, etc. which go beyond data collection, to analysis and visualization.
Figure 8. Example of ESG big data gathering, analysis and visualization. Source: ESG Enterprise, 2021
ESIA typically focuses on more site-specific data collection efforts, such as environmental monitoring and stakeholder engagement. This may include data on local environmental conditions, demographics, and other factors collected through surveys, focus groups, and on-site investigations. External data sources, such as (non)government databases, may also be used to supplement this information. The examples are EPA Envirofacts, World Database of Protected Areas (WDPA). Practitioners often use GIS software, such as ArcGIS, QGIS (Figure 9), ENVI, Google Earth Pro as data sources and for baseline analysis.
Figure 9. Example of Cloud-based GIS application using QGIS, Lizmap plugin and a web client. Source: Open GIS Lab
Software solutions for impact evaluation
ESG often involves the use of rating and scoring digital systems to evaluate companies' ESG performance. Usually those are general-purpose sustainability performance management software, such as Dow Jones Sustainability Index, CDP Climate Change questionnaire, MSCI ESG ratings and others. These systems typically use a set of indicators and metrics to score companies based on their ESG performance.
ESIA, on the other hand, uses different scoring methods for impact evaluation, such as environmental risk assessment, social impact assessment, and health impact assessment. Yet, practitioners usually do not rely on a specific software solution for impact scoring. However, technical technical software solutions are used for environmental modeling, e.g. AERMOD, CALPUFF for air dispersion modeling, WAM, WASP, MIKE for water quality modeling, etc. Those results are used in ESIA, to support impact evaluation and justification of the presented arguments.
Digital and on-line reporting, stakeholders engagement and decision-support
ESG reporting is often done digitally, with companies publishing ESG reports on their websites and through digital reporting platforms such as the Global Reporting Initiative (GRI), Carbon Disclosure Project (CDP) and the Sustainability Accounting Standards Board (SASB). ESG reporting typically requires the analysis and visualization of large amounts of data, often in the form of charts, graphs, and interactive dashboards. Various online tools are available for interactive ESG data visualization, such as PwC Intelligence (Figure 10), Tableau, SAS, Power Bi, Datawrapper and Flourish.
Figure 10. Example dashboard for ESG reporting software. Source: ESG Intelligence by PwC
Meanwhile, ESIA still relies more on traditional reporting methods, such as printed reports and public meetings. In recent years, the interest in ESIA digital reporting has increased. Many of those exploit GIS platforms and their Storyboards, bringing more visual elements (e.g. interactive maps, 3D plots, movies) into ESIA reports (see example in Figure 11). However, those were mostly technical summaries, while full reports are still not seen.
Figure 11. Screenshot out of digital EIA report example — project highway A303, UK. Source: AECOM using ESRI ArchGIS platform
ESIA typically places a greater emphasis on stakeholder engagement and participation than ESG, and as such, started to use tools for managing stakeholder engagement, such as online portals for collecting feedback and input from stakeholders (e.g., Citizen Space, Social Pinpoint, Bang the Table). ESG may also use similar tools, but the emphasis on stakeholder engagement is not as high (examples: Stakeholderly, EngagementHQ, Ethos Engagement).
All mentioned tools for impact evaluation, digital reporting and stakeholder engagement can support decision making. In addition, both ESIA and ESG decision-makers may use multi-criteria decision analysis (MCDA) software, or general Environmental Management and Compliance systems. However, use of decision-support software is still not widely used among regulators and other decision-makers, especially in ESIA.
Utilization of artificial intelligence
In recent years there is a growing interest in the possible use of artificial intelligence (AI) in both ESG and ESIA assessment processes. They may utilize AI (Machine Learning, Deep Learning) in various ways, such as for large data analysis and pattern recognition, but also for predicting future trends and impacts.
ESG is again the frontrunner, as it already uses AI algorithms to analyze social media data and identify trends in public opinion on ESG issues, in sentiment analysis tools (e.g. Repustate, Aylien, NetBase Quid, Malena).
ESIA is just starting to use AI to analyze environmental data, such as satellite imagery and remote sensing data, to identify environmental impacts and risks (e.g., Planet, Descartes Labs, Orbital Insight). However, there are many other possibilities for AI in ESIA, for example use of very actual Large Language Models (LLM — NLP) for recommendations and decision-making support; Deep Learning algorithms for impacts’ significant predictions, etc. In our previous article we proposed how AI can be exploited for derivation of coherent and reliable scoring methods for impact evaluation (read here). In our forthcoming article we are going to present and discuss in more detail various opportunities, as well as foreseen difficulties, for implementation and adoption of AI in ESIA.
Overall status of digital transformation
In conclusion, ESG practitioners are using digital solutions and software in Cloud, more widely and at a more advanced level in comparison to ESIA. The connection to digital and adoption goes rather naturally for ESG. Perhaps the reason is that the ESG field is younger, currently more vibrant and attracting more early career specialists, which are usually more enthusiastic towards digital.
However, one should take into account that ESIA requires much more comprehensive analysis then ESG report with a complex source-route-effect analysis. In our first blog article we discussed the various reasons why digital transformation of ESIA is at initial level and progressing rather slowly. The text also outlines the need for an integrative digital platform, which can connect different software and methods, and process the data efficiently for digital reporting. Read more about such an ESIA system — what should it enclose and be capable of, as well as how to develop and implement it. The collage of our solution Envigo, with which we aim to achieve listed goals is below (Figure 12).
Figure 12. Example collage of a digital platform for ESIA. Source: Envigo software
From the overview of digital solutions presented above, there is apparent overlap between the types of software used in these similar fields. This opens new opportunities for certain integration of data-based solutions, for the sake of efficiency, higher quality and accountability.
What are possibilities for integration of ESIA and ESG? What is the role of all-encompassing digital platforms?
Integration for better investment decisions and long-term project sustainability
ESIA and ESG can be more integrated by assessing the financial risks and opportunities associated with environmental and social impacts. ESIA can be used to holistically identify environmental and social risks, while ESG can provide insights on broader financial models. More precisely, detailed impact assessment analysis performed in ESIA could involve scenario analysis on a project's financial performance under different future states. For example, it could use ESG ratings and metrics such as carbon pricing and shadow pricing of social and environmental impacts. This would help investors to better understand the long-term value of investments and make more informed decisions on projects, during ESIA. Later on, it also helps ESG to get a more holistic and rigorous analysis for companies, by exploiting ESIA studies, which are rarely reused after project appraisal.
Namely, above mentioned ESIA and ESG integration would allow considering and reassessing environmental and social impacts throughout the entire project or operation life-cycle, from planning and design to decommissioning and closure. This can involve the recurrent use of integrated assessment methods and sustainability reporting to track and manage impacts over time. ESG considerations can also inform the development of management plans and monitoring programs for environmental and social performance. And vice versa, ESG could include broader environmental and social impacts analysis in their reports.
Unifying regulations and standards for sustainable energy transition
ESIA and ESG can be further merged by developing and implementing a unified set of regulations and standards across different jurisdictions and sectors. This can involve the harmonization of existing regulations and standards to ensure that sustainability considerations are consistent and complementary; as well as the development of new regulations and standards that explicitly integrate ESG considerations. The efforts can also involve promoting the use of international standards and guidelines, such as those developed by the International Organization for Standardization (ISO). Integration and harmonization of ESIA and ESG would also help public stakeholders to get familiar and better understand the analyses and reports.
Such consolidated ESIA and ESG rules and standards could leverage the synergies between environmental and social sustainability and the transition to a low-carbon economy. Particularly, it would involve the use of mentioned integrated methods for evaluating the environmental and social impacts of energy systems and technologies. This would ensure that the energy transition is managed in a sustainable way, aligned with UN SDGs. Furthermore, new policies and strategies should promote sustainable energy transition. For example, they can also involve the use of green bonds and other sustainable finance mechanisms to support investments in renewable energy and energy efficiency.
Integration enabled through digital methods, systems and platforms
Realization of above listed ESG-ESIA integrations can and should be strongly supported by digital systems. Actually, without ample inclusion of digital technologies the advancements and integration cannot be achieved at a desirable level and timely. This was well elaborated within the several strategic priorities in the Action plan for a sustainable planet in the digital age, by the UN-backed Coalition for Digital Environmental Sustainability (CODES).
To attain the integration goals, ESIA and ESG can be using the same or connected digital methods, systems, and platforms for data collection, analysis, and reporting. For data gathering and harmonization, this should involve the use of common data standards, protocols and validated databases. This can also involve the use of emerging technologies, such as mentioned AI, but also blockchain, to enable secure and transparent data sharing.
For incorporation of unified and standardized methods for impact evaluation and analysis, either a single platform, or tight integration of different software applications (through APIs) in a digital ecosystem, would be needed. This would ensure that data and results are consistent and accessible to different participants and stakeholders, across different stages of a project or operation. Particularly, such a comprehensive digital ecosystem would be firstly used in the project design phase, for assessment of alternatives and initial mapping of potential issues (read more in our article on project alternatives assessment). Then, an investment ESG and due diligence would follow. After this a full ESIA would be conducted in the same platform and framework. All steps would be utilizing integrated ESG-ESIA methods for impact evaluation, elaborated above. Further on, during project operation until closure, this digital platform and software tools would be used for real-time monitoring, but also for reassessment of impacts and tuning of mitigation measures.
Naturally, it would be beneficial to use the same digital reporting application during the whole project life-cycle, for all steps — investment ESG, ESIA and follow up ESG reporting. Firstly, this would enable direct connection to data being processed and analyzed. Secondly, it would provide a consolidated and standardized reporting framework. Even the ESG reporting for existing companies or operations (not new projects) could be using and benefiting from this unified digital reporting framework. Overall, this would help companies, investors and assessors to streamline ESIA and ESG processes much better and make it easier for companies to manage environmental and social risks and opportunities over time. Furthermore, a single digital platform or ecosystem with standardized reporting would facilitate decision-making for regulators, as well as make the review and participation easier for the public.
How to broadly assent to methods and standards, and develop or integrate such an all-encompassing sustainability digital ecosystem is another delicate topic. Nevertheless, international organizations, such as the UN (UNDP/UNEP/UNIDO, e.g. CODES initiative), ISO or the EU (within Green deal initiative) have the resources and endorsement by many.
Founder of Eon+ and the principal co-author of Envigo