Satellite data: The key to reliable ESG reporting
Last edited: October 4, 2023
Published: October 4, 2023
Earth Intelligence Specialists
Satellite data: The key to reliable ESG reporting
In recent years, ESG (Environmental, Social, and Governance) reporting has undergone a significant transformation. Starting from 2024, almost 50,000 companies are going to be subject to mandatory sustainability reporting, including non-EU companies which have subsidiaries operating within the EU or are listed on EU regulated markets. With obligations often hinging on factors like company size, industry, and stock exchange listing.
Leading nations in this field, such as the United States, the United Kingdom, and Japan, have implemented stringent ESG reporting regulations, setting high standards for corporate transparency.
Additionally, United States, China, and the European Union have emerged as major producers of ESG reports, primarily due to their large numbers of publicly traded companies subject to mandatory reporting. These companies, often in industries with substantial environmental impacts, such as Energy, Manufacturing, Transportation, play a pivotal role in ESG reporting, especially in assessing global sustainability efforts. As the world continues to prioritize accountability and sustainability, ESG reporting standards are poised to become more comprehensive and widespread, reshaping the landscape of corporate reporting.
Will ESG reporting be the next frontier for satellite data utilization?
Recent regulations indicate a growing trend in this direction. With mandates such as the European Union's Space Regulation and the United Nations' Sustainable Development Goals (SDGs) implementation. Satellite data has proven its worth as a valuable tool, offering businesses a near real-time perspective of their operations and environmental impact. This data-driven insight empowers companies to elevate operational efficiency, curtail emissions, and proactively address risks, all while meeting the emerging demands of regulatory bodies worldwide.
Setting the Stage: The Ascendance of ESG Reporting
Before we delve into the geospatial realm, let's set the stage. The genesis of ESG reporting traces back to a global awakening regarding the need for corporate responsibility. ESG, encompassing Environmental, Social, and Governance factors, emerged as the compass guiding organizations towards ethical and sustainable practices. Its ascent to prominence was not sudden, but rather a response to a changing societal landscape.
As concerns about environmental degradation, social inequality, and corporate ethics grew, stakeholders from investors to consumers began demanding greater transparency. This marked a paradigm shift, where corporate success was no longer measured solely by financial performance but also by ethical and sustainability considerations. Companies came to recognize that their environmental footprint, social impact, and governance practices directly influenced their reputation, profitability, and long-term viability. ESG reporting thus became a cornerstone in demonstrating commitment to sustainability, reflecting the evolving expectations of a conscientious world.
Challenges in Measuring ESG's Environmental Data
The measurement of E (Environmental) data within the realm of ESG reporting is a complex undertaking. Currently, it often relies on self-reporting by companies, which can introduce limitations in terms of reliability and transparency. While many organizations genuinely strive to provide accurate data, the lack of standardized reporting methodologies and the potential for greenwashing—where companies overstate their environmental achievements—pose significant challenges.
To address these concerns, auditors, often external to the company, assess and validate the accuracy of ESG data. However, even auditing is not without its challenges, as it can vary in rigor and independence. Achieving a higher degree of reliability and transparency in E data measurement requires the development of standardized reporting frameworks, rigorous auditing practices, and greater collaboration between companies, regulators, and auditors to ensure that the environmental aspects of ESG reporting truly reflect a company's impact on the planet.
Validating ESG Environmental Data with Satellites
Satellites offer a wealth of data sources that could serve as tools for verifying E (Environmental) data presented in ESG reporting. These sources include, but are not limited to, observations of land use and land cover changes, monitoring of greenhouse gas emissions, and assessments of deforestation rates. Satellites can provide objective and near real-time information, enabling the tracking of environmental indicators on a global scale. For instance, they can measure changes in forest cover, detect emissions from industrial facilities, and monitor the health of ecosystems. By integrating satellite data into ESG reporting, companies can improve the credibility and transparency of their environmental disclosures, reinforcing their commitment to sustainability and accountability.
The Role of Satellite Data in Risk Assessment
The role of satellite data in climate risk assessment becomes a beacon of hope for companies seeking to navigate the increasingly complex topic of climate extremes. Imagine a world where satellites offer a holistic and predictive glimpse into Earth's intricate climate tapestry, empowering businesses to not only assess but also anticipate the impending climate-related perils. These observers diligently monitor the subtlest shifts in temperature, the rising ebb of sea levels, and the intricate dance of precipitation patterns, all while keeping a watchful eye on the performances of extreme weather actors—mighty hurricanes, relentless droughts, and incendiary wildfires. It serves as the catalyst, granting businesses the foresight to not only protect their operations but also to become stalwart contributors to the global endeavor to combat climate change.
Geospatial Data and Orbify: Transforming ESG Reporting
In conclusion, geospatial data is leading the charge in reshaping ESG reporting, offering the potential for companies of all sizes and industries to thrive in this landscape. It equips businesses with the tools they need to make well-informed decisions, and reinforces their commitment to sustainability.
At Orbify we’ve been working on releasing specific use case based reporting templates that focus on emissions monitoring, air & water quality assessment, soil erosion & degradation, and more. If you’re interested in learning more please schedule a call with us.
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