man in the fields

Beyond ‘measuring’

How quality data and management information drives your sustainability strategy

Lloyd Richards, Director, Consulting and Kate Stimson, Senior Manager, Consulting
30/01/2025
man in the fields
Sustainability programmes are built on data and management information (MI); without accurate and complete information it is challenging to make decisions in an effective way. We are now seeing organisations move past the concept of ‘what gets measured gets managed’ and towards a data- and MI-driven sustainability strategy that supports effective risk-based decision-making.

Previously, we discussed the importance of capturing accurate emissions  data as a first step towards meaningful sustainability MI. Continuing the journey, MI can be put to a range of purposes: 

  • supporting organisations’ decision-making processes 
  • identifying risks and opportunities 
  • directly in external reporting and communications.

To be effective at any of those purposes, data backing the MI needs to be collected deliberately and strategically. When the purpose of data collection is clear, the methods and metrics used can be tailored to ensure data accuracy and relevance. Aligning data and MI to the sustainability strategy will help to reduce redundancy; reducing cost and efficiently using resource. However, the topic of sustainability is extensive, and there are a wide range of data points and MI for organisations to measure, monitor, and set targets for.

With the increasing pressure for transparent reporting and increasing legislation, organisations are well on their way to developing their sustainability strategies. We suggest organisations take a step back and take three important steps to enhance their sustainability data programme.

1. Understand the gap 

Sustainability reporting and management require both quantitative and qualitative data.

Quantitative elements of MI rely on accurate information to be captured, stored, and then further utilised in calculations, models and targets. Organisations are typically well-equipped to store quantitative data but may be unfamiliar with the new and often challenging requirements for large amounts of sustainability data; especially when considering the inherent uncertainty in most sustainability data, which should be considered when using the data for its different purposes.

Organisations must ensure that appropriate levels of controls are in place for each of the defined purposes. At a minimum, this should include policies and procedures but may also include a review of data systems and support from the internal audit team.

Therefore, organisations must understand their current data maturity and capabilities. A good first step is to conduct a data gap analysis against existing internal or external frameworks and an audit of existing data. Other useful tools are internal or peer benchmarking and obtaining certification (ISO 14001).

2. Fill the gap
Organisations have not traditionally been structured to request or provide basic sustainability data in a consistent format, and external solutions are improving but often incomplete. There are several options which fall into three general buckets.

System  Description Considerations Example - measuring your emissions
Internal solutions Enhance existing internal solutions such as underwriting systems to enhance capture of sustainability data in real time. 

Advantages:

  • leverages existing systems to integrate sustainability responsibilities
    throughout the entire organisation
  • development and ownership of potentially valuable datasets.

Ability to set own level of controls and full transparency over data limitations.

Disadvantages:

  • time consuming
  • requires organisational change

Many organisations already do this for simpler emissions sources: collating data from various internal systems, such as procurement, employee travel and expenses, and facilities.

However, for more complex emissions sources we have found that many insurers are finding that their core underwriting data is not sufficiently robust to support ESG scoring or insurance-associated emission calculations.

External solutions  Several external solutions and data sources are on offer designed to support organisations with different requirements regarding sustainability data and management information.

Advantages:

  • purpose build solutions for sustainability data
  • alignment with international frameworks
  • limited change management relative to other options.

Disadvantages:

  • cost
  • coverage of external data sets, particularly for privately owner counterparties
  • integration challenges.
External solutions can calculate emissions using existing third-party data or proxies. Often, the purchasing organisation will have access to a dashboard, which allows it to visualise the data and easily report against different frameworks.
Blended approach  Internal and external systems can both be used Simultaneously to fulfil the organisation's needs and requirements, often using proxy data such as the PCAF (Partnership for Carbon Accounting Financials) database to fill gaps.

Advantages:

  • tailor the cost and effort levels to desired appetite

Disadvantages:

  • bringing datasets together risks errors emissions and excess costs. 

It is likely that a combination of the above two examples will be required.

Organisations must improve data capture themselves before backfilling with third party solutions becomes viable.

3. Continuously improve

Organisations need to have a strategy in place to ensure continuous improvement in data; this is true of all data, not only sustainability. This improvement programme should include the actual data and MI, but also review and improve the surrounding processes related to data and MI capture, processing, storage, sourcing, and management.

Organisations can take the chance to identify these new opportunities as new data is captured or as existing limitations are overcome. We have seen organisations improve their reporting processes generally and as a result become more confident with the nuances of sustainability reporting relative to traditional financial reporting. It is important that organisations develop a “muscle memory” for regulatory reporting, especially for the Corporate Sustainability Reporting Directive (CSRD) where there is a strong need for robust data and good internal controls to meet the requirements for independent assurance of disclosures.

Data and MI are key for your sustainability strategy, providing quality information as a basis for decision-making and development. Organisations are moving past siloed sustainability data and towards integration into overarching data systems, taking the opportunity to update legacy systems as they go. Work being done now should be the foundation for the long-term journey rather than a solution that can be used to inform risk selection and pricing today.

Through our practical and experienced team, Crowe continues to support our clients in setting their own agenda to address rapidly changing sustainability and climate-related reporting requirements. For more information, please contact Lloyd Richards or your usual Crowe contact.

Contact us

Alex Hindson
Alex Hindson
Partner, Head of Sustainability
London

Insights

Insurers have unique challenges in calculating the emissions of their underwriting portfolio and can use PCAF to get a baseline of these emissions.
Upcoming regulations will require limited assurance, with future expectations of reasonable assurance on statements.