When it comes to emissions, uncertainty likely doesn’t cut it.
A consumer products company seeks increased clarity around its sustainability data through ESG assurance readiness and works to build trust with stakeholders.
ROAD MAPS ARE A LOT MORE HELPFUL WHEN YOU KNOW WHERE YOU’RE STARTING FROM.
The Situation
Sustainability leadership at a consumer products company had no doubt about where they wanted to go. Their robust department buzzed with ambitions and goals, envisioning road maps to future states in which greenhouse gas (GHG) emissions were reduced and more renewables powered the company’s operations. The future vision seemed clear. But understanding their current state? That was a little hazier.
The company’s plants and facilities sat in locations across the globe, and the process for calculating emissions and gathering waste and water usage data often varied from location to location. Without a cohesive framework of processes and internal controls to support those processes, pulling an accurate, meaningful picture out of the data took significant time and effort.
Much of that time and effort went toward producing annual reports that detailed the company’s performance across a number of environmental, social, and governance (ESG) metrics to measure the impact of its operations; track progress; and bring employees, investors, and customers along with them. While they were proud of this progress toward internal clarity and external transparency, sustainability leadership wanted to deepen confidence in their ESG reporting.
THE SOLVE
Realizing that working with an independent assurance provider could go a long way toward helping them see where they stood, the company asked Deloitte to perform a limited assurance engagement (a conclusion about whether the assurance provider is aware of any material modifications that should be made to ESG information in order for it to be in accordance with set criteria) on the GHG emissions data included in that year’s ESG report. The Deloitte team reviewed the consumer products company’s emissions data as prepared in accordance with the GHG Protocol, the company’s chosen framework. For the first time, the client’s annual ESG report contained data on which limited assurance was provided.
Later that year, still looking to solidify and strengthen their reporting process, the client’s sustainability leadership engaged Deloitte to conduct a readiness assessment across a different set of metrics. Drawing on years of experience and deep industry and ESG subject matter knowledge, the Deloitte team dove into the client’s previous-year data around health, safety, waste, and water usage under the Global Reporting Initiative (GRI) Standards.
The Deloitte team used Deloitte’s ESG road maps and disclosure analytics tool to facilitate the readiness assessment and conducted a gap analysis to provide advice and recommendations for areas where the company could consider potential changes to meet the requirements of their chosen reporting framework. Then the Deloitte team methodically performed assessments across the health, safety, waste, and water metrics within the GRI Standards: holding walkthroughs with company process owners, assessing calculation policies, understanding quality assurance measures, testing data points, and documenting potential risks and uncertainties.
Throughout the readiness assessment, the Deloitte team recommended processes that could be standardized across the company’s locations for more rigorous reporting. To provide a cohesive set of checks on those processes, the company wanted to adapt its existing internal controls framework used for financial disclosures to also validate its ESG reporting. The Deloitte team provided advice and recommendations to company management for how to achieve its objectives.
When the time came to release the following year’s ESG report, the company felt more confident in its controls and data and more empowered to take tangible action to improve upon its commitments in the years to come.
NO MATTER THE SUSTAINABILITY GOAL, ACCURATE REPORTING MATTERS.
The Impact
During the engagement periods, various announcements about proposals from the Securities and Exchange Commission (SEC) in the United States and the Corporate Sustainability Reporting Directive (CSRD) in the European Union revealed a future with different reporting requirements, with which many companies would need to comply. With the consumer products company’s sharpened and fine-tuned approach to reporting on ESG metrics, it may have a head start on preparing for what the future could hold.
Ready to respond:
As the company continues to improve and standardize its recording and reporting of ESG-related activities across the organization, it has become better prepared to respond to shifts in disclosure requirements from regulatory bodies around the world and produce a sustainability report more efficiently and effectively than before.
Clear about today, optimistic about tomorrow:
The company’s GHG emissions, health, safety, waste, and water usage data included in its global sustainability report can provide a heightened level of trust for its employees, investors, and stakeholders. For the members of the sustainability team, the greater confidence they have in their measurements today can foster more clarity about the steps they may take to get to the future they want.
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Bill McFarland
Audit & Assurance Partner
Deloitte & Touche LLP
bimcfarland@deloitte.com
+1 313 401 3842 -
Angie Walk
Audit & Assurance Managing Director
Deloitte & Touche LLP
awalk@deloitte.com
+1 214 284 4637 -
Chris Harder
Audit & Assurance Senior Manager
Deloitte & Touche LLP
charder@deloitte.com
+1 469 417 2359 -
Torey Jackson
Audit & Assurance Manager
Deloitte & Touche LLP
tojackson@deloitte.com
+1 213 553 3080
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