Climate data should be integrated into business strategy in order to drive the transition to a low carbon economy, according to corporate representatives speaking at the Economist's 2nd annual Sustainability Week on Monday (3 October).
Sebastian Steinhaeuser, chief strategy officer at SAP, said that ESG data should be embedded "into every business process" as action was needed to reduce climate risk.
He added: "You will not have a sustainability transformation separate from your business transformation, but you will transform your business with sustainability as a key business principle in mind."
Harriet Howey, global non-financial and ESG reporting lead at Diageo, agreed that climate data should be built into core business processes and used the example of capital expenditure as a particular area where it should be built in.
"If you've got big capital expenditure programme, you need to make sure it is supporting your sustainability effort and not inadvertently going to be somehow impacting them negatively," she said.
Olivier Tichit, director of sustainability at Musim Mas, said that ESG data should not only be used to produce "glossy TCFD reports" but also to help companies internally assess the climate risks and opportunities they face.
Howey suggested integrated reporting as a practical way of ensuring climate data is embedded into the wider business process.
She said: "This (climate) information should be provided at the same time as financial disclosures. The two things should not be seen in isolation and reporting on your most material ESG issues, which should of course include climate change risk, is really part of your fiduciary duty as a company and as an issuer."
Martin Skancke, board chair at Principles for Responsible Investment, also highlighted the value of integrated reporting. He said that it gives climate data "a whole different level of verification once it is included in financial filings".
However, the panellists highlighted the challenges of collecting transparent climate data for companies with complex value chains.
Tichit highlighted in particular that some actors on the value chain consider some data private. This presents a governance issue for Musim Mas which takes the approach of aggregating the data across the value chain.
Howey called for greater alignment of standards to reduce the reporting burden on companies by standardising the climate data companies should disclose.
"We want to see is a real effort for standardisation and consolidation of reporting frameworks. Really good engagement with companies and investors on what's practicable and also what's useful and necessary in terms of decision making and a continuous commitment to improvement," she said.
Tichit also emphasised the need for "common aggregators" for companies to report on climate data.
Skancke praised the work of the ISSB in starting to standardise reporting but that it was important to ensure their standards are "fit for purpose".