Introduction
Reviewing ESG reports is essential to ensuring accuracy, consistency, and compliance with reporting standards. At KEY ESG, we’ve developed a straightforward protocol to help fund managers validate and analyse ESG reports in our platform with ease. This guide distils the key steps to follow and provides practical tips to ensure your ESG reviews are both efficient and comprehensive.
Key Steps to Review ESG Reports
1. Check Mandatory Data Fields
Ensure all required fields are completed in the ESG report. Missing fields can lead to reporting gaps, so double-check for any empty sections or placeholders like "TBD" or "N/A."
2. Review Opt-Out Reasons
Evaluate the reasons provided for any opt-outs. Make sure they’re valid and detailed (e.g., a business justification for not reporting Scope 3 emissions). If an opt-out seems questionable, consider whether it aligns with industry norms.
3. Validate Emissions Data
Check for:
Unexplained spikes or drops in emissions.
You can check year-on-year variances in emissons by navigating to Reports > Select Company Report > Compare breakdown 'Vs prior year' to see increases or decreases, and their percentage variance year on year.
Click the button below to learn more about viewing and exporting your reports:
Missing data for Scope 1, 2, or 3 emissions.
Alignment between reported emissions and external benchmarks or methodologies.
4. Verify Supporting Evidence
Cross-check reported metrics against the provided evidence, such as invoices, contracts, or energy bills. Ensure documentation supports the reported data, especially for critical categories like Scope 3 emissions.
5. Assess HR and Payroll Metrics
Review employee-related metrics such as FTE counts and pay data. Look for anomalies like implausibly high turnover rates or inconsistencies between payroll and reported employee numbers.
6. Spot Missing or Incorrect Data
Flag any gaps or errors in the report. Common issues include incomplete supplier spend data, mismatched extrapolations, or negative values that require correction.
7. Cross-Validate Data
Compare metrics across the report and ensure consistency. For example, emissions data should align with the company’s operational scale, and reported metrics should not contradict external benchmarks.
8. Conduct a Final Review
Take a step back and conduct a holistic review. Ensure all anomalies are resolved, the report is complete, and the data aligns with relevant ESG and regulatory standards.
Why It Matters
A thorough review ensures that your ESG data is robust and reliable, enabling better decision-making and compliance with frameworks like SFDR. By following these steps, you can identify data gaps, validate key metrics, and strengthen your ESG reporting processes.
Need Help?
Our team is here to support you. If you have questions or need guidance:
Send us a message via the in-platform chat function.
Email us at support@keyesg.com.
We’re happy to assist you in making your ESG reviews as smooth as possible.
Conclusion
Reviewing ESG reports doesn’t have to be overwhelming. By following these simple steps, you can ensure your data is complete, accurate, and compliant. Take the time to review thoroughly, and don’t hesitate to reach out if you need assistance.