Frequently Asked Questions
Get answers to frequently asked questions about FigBytes, ESG and ESG software.
What is ESG?
ESG – environmental, social, and governance — refers to a set of criteria used to evaluate a company’s financial performance and business operations based on its impacts related to the environment, social responsibility, and ethical leadership.
ESG reporting is increasingly used by activist and socially-conscious investors when screening companies. While many companies can make a claim to sustainability, following an ESG framework leads to easier comparison, often in a quantitative way. Investors can identify potential for risk, while companies can highlight meaningful improvement and success.
Implementing an ESG program is not simply a reputational exercise. By proactively reviewing their environmental, social and ethical impacts, businesses are able to drive growth, identify new market opportunities, streamline productivity, and reduce future costs associated with regulatory non-compliance and litigation.
Learn more about ESG strategies and how they can help your business become more profitable and socially responsible.
What are material ESG issues?
There are a number of ESG reporting frameworks. Some have been designed for particular industrial or business sectors, while others are for operations in specific geographic regions. While each framework is slightly different, all will include a detailed list of ESG factors to be reported on. However, this list is not a one-size-fits-all framework, and companies will need to identify which factors are material to their operations and reporting.
Determining materiality is a critical early step in completing ESG reporting. This is more than a paper exercise and there is no point in spending significant time and resources on factors that aren’t relevant to a business’s operations or will have limited opportunity for improvement.
Learn how to conduct a materiality assessment for your company.
Understanding your material ESG issues is vital because these issues shed light on problems that may endanger a business enterprise’s value. In fact, companies focusing on material ESG issues are more likely to outperform in the market.
How do ESG software tools support businesses?
ESG software tools like FigBytes support major business goals by providing valuable ESG insights across environmental, social, and governance priorities. They can provide real-time performance data, year-over-year changes, and highlight areas requiring immediate attention or potential future improvement. High-quality, consistent data tracked and measured over the long-term can aid in building an accountable, thriving business.
For example, for organizations focused on maximizing the “E” in ESG, FigBytes supports initiatives like carbon emissions accounting and water stewardship. The cloud-based system can be shared with multiple office locations, along with suppliers, vendors and others required to contribute information in order to complete tasks like greenhouse gas estimates.
Using ESG software simplifies data collection and yields high-quality data using verified and internationally-recognized methodologies. It enhances credibility with investors and the community and makes it easy to update reports annually or as needed.
Many organizations may be familiar with carbon accounting software, as this is a frequent starting point for more quantitative sustainability tracking. But ESG software goes beyond carbon calculations. For example, FigBytes solutions help simplify your data collection and reporting in multiple areas including:
- Climate Accounting
- Water Stewardship
- Diversity, Equity & Inclusion
- Supplier Transparency
What are financed emissions?
While even the average person can understand the idea of direct emissions from industrial processes, like the combustion of fossil fuels, financed emissions are not as immediately visible or easily understood. They are, however, gaining increased attention as part of a Scope 3 emission category and a comprehensive carbon accounting program.
Financed emissions are those emissions released by business operations within a financial portfolio. These could include refinery emissions from a portfolio of oil and gas companies, or the greenhouse gasses emitted from fleet trucks at a recently-acquired logistics company.
More broadly, ESG also refers to the social and governance aspects of a portfolio company’s operations. Investors may have defined criteria for factors including financed emissions, as well as international labor practices and anti-corruption policies and will use those criteria to determine whether to invest or not.
How does an ESG strategy affect stakeholder engagement? Can ESG help improve stakeholder and investor relations?
Data collection can involve all levels of the supply chain, as well as tenants and franchisees; and reports may need to be communicated to corporate leadership, investors, regulators, and community representatives. So it’s important to have a clear stakeholder engagement strategy.
A clear ESG strategy is appealing to investors, with the potential to make all the difference in your business’s funding efforts. But it’s also an opportunity to make conscientious business decisions in terms of choosing suppliers and vendors who will responsibly manage raw materials and transport intermediate products and finished goods in an energy-efficient manner.
Transparent ESG insights and analysis show investors a commitment to sustainability and increase trustworthiness in the community.
Can ESG analytics help improve performance?
ESG analytics can help improve overall performance in profitability and productivity. Here’s how.
Method #1: Streamline your data management strategy
The power of streamlining comes from FigBytes’ built-in automation. The system automatically collects and calculates data, allowing you to focus on other tasks while it works for your organization.
Key features that sets the platform apart from other software available today include:
- Centralized data when collecting from multiple sources across the organization and throughout the supply chain
- Automated calculation and improved data accuracy with FigBytes’ built-in emission factor library for metrics like carbon accounting and water impacts, as well as anomaly detection
- Simplified reporting with built-in industry ESG frameworks and standards
- Security and transparency with data tracking and audit trails
Method #2: Unify Environmental, Social, and Governance data
With our intelligent software, you can monitor your ESG data in one place.
This includes Scopes 1-3 for carbon accounting, water stewardship, and social and governance metrics collected in real-time.
It’s easy to use, and you can see your ESG data within seconds, as well as provide polished and streamlined reports to stakeholders.
Method #3: Build better ESG insights
Data is used to make decisions across a company for everything from marketing budgets to software investments. ESG is no different. A software tool like FigBytes helps make decisions with more authority by including financial insights from our dashboards.
With just a few clicks, you’ll be able to create custom analytics that provide clear and presentable information for partners, investors, or other stakeholders.
The best part is you can connect these numbers to the larger ESG strategy. You’ll know where progress has been made toward meeting goals while also gaining insight into what adjustments might be needed along the way to improve outcomes.
Can an ESG strategy aid in risk assessment and reporting?
Putting ESG initiatives into practice is a rigorous but worthwhile priority. A cohesive risk assessment strategy can identify risks and impacts, both for internal business operations as well as in the supply chain or in a financial portfolio. This helps leadership and investors make strong decisions and reduce the potential for future hotspots to become an issue.
FigBytes brings together automation, simplified reporting, and investor-grade data to support both internal and third-party oversight and auditing. Here’s how ESG strategy supports more aligned risk assessment and reporting:
Risk assessment goes hand-in-hand with ESG strategy. It can inform how suppliers and vendors are chosen, or which companies will receive future investment. It allows business leaders to track ongoing performance and be confident in their data year over year.
Risk assessments often rely on an ESG score. The ESG score measures the risk and compares it across an investment portfolio or potential investments. Scores can be expressed numerically or alphabetically and created for different cases: Some are designed to support assessing investments and credit risks, while others help human resources and staffing decisions.
The risk assessment implications of ESG reporting highlight the importance of determining materiality as discussed above. For example, a power plant’s ESG score may primarily be based on carbon emissions or water stewardship. In contrast, a law firm’s ESG score would be based on ethical leadership and representation within the community.
But risk assessment isn’t only necessary for a business’s operations and status — it’s also an essential step in gaining investors. Nearly 60% of investors say that a company that proactively manages ESG risks is a crucial decision-making consideration. In other words, the better your reporting and assessment, the more likely investors will be drawn to the company.
ESG reporting offers a snapshot of a company’s environmental, social, and governance operations and its progress toward achieving documented targets. Reporting increases transparency for both internal and external stakeholders.
External stakeholders: Clients, investors, suppliers, and the general community all benefit from seeing consistent and consolidated data in ESG reports. This data can tell the public and investors that an organization is, in fact, sincere about their actions and are putting those actions into play.
ESG reporting can show how a company strives to reach net zero emissions over time. Releasing this information can also illustrate to potential investors that the company is an ethical and low-risk long-term investment.
Internal stakeholders: Those who have a direct relationship with the company, like employees, owners, and investors need to receive cohesive and consistent reports over time. This enables them to accurately track changes, set realistic goals, understand the strategy, and allocate resources from one year to the next.
Proper reporting can document the steps of the strategy so that internal stakeholders can identify what works (and what doesn’t) and be better prepared for the next step.
What does FigBytes offer in terms of ESG management?
At FigBytes, we believe the time to act is now. That means holding every company accountable for their actions within their communities. But with around 600 possible ESG frameworks to choose from, creating a comprehensive and sustainable ESG reporting program that is useful for both business operations and investor decision making is no easy task.
FigBytes helps companies make sense of the ever-changing regulatory landscape by providing a comprehensive approach to ESG that can be tailored for their specific needs.
From climate accounting and strategy development all the way through reporting obligations, Figbytes has you covered, so your metrics stay focused on what matters most.
To accomplish this, FigBytes offers four modules—Strategy Management, Data Management, Analytics & Reporting, Engagement Tools—within its integrated ESG platform, which tracks, analyzes, and connects ESG data.
What is the Strategy Management module?
Companies that implement ESG strategies outperform other global companies. The Strategy Management module helps you clearly lay out a plan and refer back to it for reference or when presenting to investors. Features include:
- Visualizing goals and priorities by selecting and customizing the elements that tell your strategy story to any audience. A developed strategy is what draws in stakeholders and investors.
- Identifying and connecting key metrics so you can link your strategy directly to your data with integrated scorecards.
- Communicating vision and progress with interactive maps that guide your audience through your priorities and performance. A clear strategy affects your company’s ROI and reduces lending and revenue risks.
What is the Data Management module?
FigBytes’ Data Management module focuses on all aspects of collecting, streamlining, and centralizing ESG data. A significant issue companies face with ESG initiatives is dealing with fragmented data from a variety of sources, often managed through spreadsheets or systems cobbled together over the years and reliant on a single person who knows where all the data is stored.
In other words, historically there has been no unified source of truth when it comes to ESG data nor is there a cohesive solution geared specifically to capturing, controlling, and calculating ESG data from across an organization. There’s also little to no automation.
The Data Management module features take the data at the heart of the your ESG goals and progress and:
- Centralizes data collection and allows you to organize it all in a single repository.
- Calculates data with improved accuracy using verified methodologies
- Identifies and completes gaps based on a built-in emission factor library from more than 10 agencies, automations, and algorithms
- Prepares data for auditing with industry standard security protocols and transparent audit trails
What is the Analytics & Reporting module?
The Analytics and Reporting module helps users to manage and stay in alignment with new regulations, frameworks, and even internal KPIs.
While compliance is an essential aspect of reporting — reporting according to global standards like BRSR, CDP, GRI, SASB, UN SDGs, TCFD, and GRESB — FigBytes’ Analytics and Reporting functionality goes a step further by providing insights which you can use to progressively improve your ESG program.
ESG reporting requirements thrive when using the Analytics and Reporting module through:
- Automatically connecting KPIs and data to standard reporting frameworks.
- Creating custom, data-focused dashboards for insightful visualizations as well as views that empower you to spot data gaps in emission factor summaries or various reports.
- Further validating business decisions built on powerful AI.
What is the Engagement Tools module?
The Engagement Tools module aims to enable businesses implementing ESG strategies and evaluations to connect with stakeholders at every step of the ESG journey.
Through connected, current, creative, and configurable data analysis, this module helps businesses manage three objectives:
- Visualizing your data-driven ESG story with content management tools that take your results from facts to figures to compelling insights.
- Simplifying stakeholder engagement by taking the complexity out of your ESG storytelling so every stakeholder has information they understand when needed.
- Creating ESG advocates by helping team members see how they fit into the ESG journey to become a driving force for a better future.
FigBytes helps you tell the world about your sustainability efforts and keep your stakeholders engaged every step of the way.
Organizations, investors, and individuals around the globe are taking a greater interest in and responsibility for their ESG impacts. Real-time information makes it easy to understand and share your progress with your stakeholders.
Have More Questions about ESG Reporting?
Whether you’re just starting to report ESG metrics, or you’re looking to upgrade your data quality and streamline your efforts, FigBytes can help.