Even Unsinkable Companies Hit The Sustainability Data IcebergMeabh Carey
The Sustainability Data Challenge – The Iceberg that can take down even the most unsinkable of companies.
Who's In The Boat?
The Iceberg is one of my favourite metaphors for conveying Sustainability/ESG data reporting. Symbolically, the tip of the iceberg shows what stakeholders, directors and investors want to see in ESG reports yet, exponential amounts of work and risks lurk in the deep. It’s also what lies beneath the waterline which poses the biggest risk to ships, and the greatest opportunities.
Having a bit of fun with the metaphor, I like to introduce characters like seagulls flying overhead to represent directors who may view the tip of the iceberg from afar or swoop in for a quick look before flying off. Sometimes, they perch on the highest point, do their business, and fly off without understanding the underlying value.
What's Lurking Below?
Below the surface, the iceberg has numerous issues such as data completeness, anomalies, calculation methodologies, standards and compliance, extrapolations, interpolations, and the list goes on.
Every company has that one person who understands not only everything that is visible above the waterline, but also the underlying data right down to its deepest point. The humpback whale represents this person. One of the most noble and majestic of all marine animals who has been greatly affected by Climate Change, the humpback whale has a loyal cohort of other marine animals within its ecosystem. They help collate and compile the data, and quietly, efficiently get on with the task at hand. Like the humpback whale they keep their head down getting on with the overwhelming data challenge and rarely get the reward or notice by the seagull directors above.
Think of auditors like KPMG, PWC, EY, SGS of the world as the scuba divers, who deep dive the iceberg to ensure everything is in order down there.
In 2016 we saw increasing interest from the investor community in ESG data – some commentators stating that it’s not the results that matter in this space, but rather that there are results published. In the absence of mandated Non-Financial Reporting, except for UK listed companies, this ESG data has been largely missing to date. From 2017 this is changing, not only in the EU but in South Africa, Canada, and even in the East we watch with anticipation.
Like the tip of an iceberg investors tend to view Sustainability data from an angle that indicates how the underlying risks are managed. Does the company have sufficient structures in place to safeguard against reputational and environmental risks? Do they have the tools to efficiently discover and manage the opportunities?
Think of the Accuvio sustainability platform as a submarine with powerful lighting, illuminating the risks and opportunities hiding in the dark, keeping killer sharks at bay and supporting humpback whales to focus their time above the waterline.
Finally, the question I pose today is:
- What character would you use to represent investors?
- Who does the sailboat represent?