Integrating ESG reporting into your FP&A workflows

Integrating ESG reporting into your FP&A workflows

One of the defining business trends of the past decade has been the renewed energy and momentum behind sustainability in all its forms. With mounting public pressure and more socially and environmentally conscious investors entering the market – it is no longer acceptable to run a business with a shareholder-only lens. Modern companies must embrace the fact that their operations also impact a wide range of other stakeholders whose interests must be taken into account.

These guidelines and, in some cases, regulations have been grouped under an umbrella term called Environmental, Social, and Governance (ESG) – an attempt to codify some of the key changes that need to be made to business models in order to run a more sustainable and holistically positive organisation.  In this article, we’ll explore why sophisticated reporting on ESG metrics is so important for finance teams of all sizes, and how you can integrate it into your FP&A activities.

Going beyond lip service

Before we look at the practical aspects of ESG reporting, it’s worth reiterating why it’s worth doing in the first place. When ESG was first being thrown around as a term, the underlying objectives were somewhat loose and intangible. It was a noble cause but the lack of specificity and quantitative measurement made it very easy for companies to merely give superficial acknowledgement to the goals and objectives of a more holistic business model, without actually having to change the underlying workflows, processes, and decisions. It quickly became a marketing and PR exercise, rather than something that actually moved the needle.

As time has gone on, the field has become more and more sophisticated and we’ve seen a dramatic shift toward quantifying the key metrics so that they can be measured and reported on. By analysing the impact of ESG activities in this way, companies are now more accountable to their stakeholders and they cannot hide behind marketing. They must show results for their efforts and this has been very helpful for incentivising meaningful progress.

It follows then that if you as a company want to demonstrate that you are taking the tenets of ESG seriously – then you should have sophisticated ESG reporting in place that allows for the collection of data, measurement of KPIs, and visualisation of results that then informs decision making.

The 3 pillars of ESG reporting

ESG reporting, at its best, is held up by three main pillars:

Data Collection

Your reporting is only going to be as good as the data that you bring into your system. Deciding which data sources to use, how to collect it, and how to verify its accuracy are all key decisions that need to be made thoughtfully and with keen attention to detail so that you are capturing the right things from your context and perspective.

Ideally, you want this data collection and loading into your FP&A system to be automated – but this is only possible if you’re getting regular data from consistent data sources that you can rely on. If you don’t have that, then it might mean uploading the data manually via an Excel spreadsheet or some other database, or even entering it manually into the system piece by piece. Regardless of the method, you want to ensure that you’re collecting data at the lowest level of detail possible, because it opens up many more dimensions for you to analyse when the data is consolidated.

Dashboards and Analytics

Once the data is collected, we want to visualise it so that we can make sense of the numbers. This is going to look different for every company but by building dynamic and intuitive dashboards, you can group the KPIs that matter to you and analyse them in their wider context. From here, you’ll likely want to add some qualitative commentary about the specific goals being worked toward, and then use these visualisations to present the results to various stakeholders.

The more sophisticated this process becomes, the better decisions you will be able to make because you’re working from a data-first perspective that offers some level of objectivity.


As alluded to above, the final pillar is then to integrate these results and insights into your decision-making. Here is where the rubber meets the road and if this step doesn’t happen, then you’re merely offering empty promises to what ESG is trying to achieve.

The best practice here is to take the metrics that you’ve identified and build them into your cost drivers so that when you’re running through a budgeting or planning process you can analyse different scenarios across a range of different dimensions. For example, if you’re trying to lower your carbon emissions it makes sense to build that into your travel budget and assign emission numbers to each planned trip.

As you do this, you’ll be able to use the ESG perspective to assess and evaluate your plans – prompting you to make different decisions if you see that things are outside of your acceptable range. It’s worth noting here that the quality of your software is going to play a role in how successful this exercise will be. Ideally, you want something that is directly tied to your FP&A process and that allows for cross-dimensional analyses that add value to your situation.

But if you get all of this right, then your ESG reporting can be a catalyst for building a more sustainable and stakeholder-first enterprise.

Leveraging the Apliqo UPM framework

Here at Apliqo, we are extremely passionate about building software that can enable and incentivise this sort of holistic perspective for your business. When using our suite of tools, your ESG reporting is tightly integrated with your financial and operational planning – allowing for a single source of truth about everything that you care about.

Whether you’re inputting data manually, via an Excel spreadsheet, or via an automated data source, you can follow that information through the workflow at any level of granularity thanks to the infinite drill-drown capabilities of the underlying IBM Planning Analytics back-end. All that’s left after that is to take those insights and apply them to your planning process which is easier than ever with Apliqo’s tools.

To give you a more practical demonstration of what this looks like, we’ve created a product demonstration that shows just how powerful the Apliqo UPM offering can be. We encourage you to play around with it and if you think there’s value for your organisation, be sure to get in touch, and let’s see how we can help!

Related Posts

More resources

5 ways that CFOs create value in their organisation

The role of a CFO is a highly prized one and one that carries significant cache within any company. It is one of the few positions that cover a broad scope of responsibilities both at a strategic level and within the lower day-to-day perspectives of running the FP&A activities. As such, a CFO’s focus can easily slide if they don’t have a clear understanding of what the priorities are and how they’re driving real value in the company. In this article, we’re going to explore 5 key ways that CFOs create value – and how the various Apliqo solutions can accelerate them.

Read this article
5 ways that CFOs create value in their organisation

The role of the CFO as a strategist and value creator

While a CFO has always been more strategically involved than the rest of their team, there is still a lot of opportunity for growth and, in forward-looking teams, we’re seeing things change quite quickly. 

Read this article

Workforce Attrition Modelling

When you’re embarking on a long-term mission with your company, one of the most common challenges that you face is the impact of staff turnover. With every change in your team comes reduced continuity, increased training costs, and a risk that a misguided replacement hire can slow down growth and progress. However, this is not a risk that you can ever eliminate because some level of staff turnover is unavoidable. The only thing you can do is manage it as effectively as you can. Let’s explore what that looks like in the context of the modern business environment.

Read this article
Workforce attrition modelling

Combining an internal and external focus for improved private market investing

In this article, we’re going to show how you can blend an internal focus (cash flow projections) with an external focus (fund-level benchmarking) to optimise your investment decisions and arrive at more robust and fine-tuned portfolio constructions.

Read this article
In this article, we’re going to show how you can blend an internal focus (cash flow projections) with an external focus (fund-level benchmarking) to optimise your investment decisions and arrive at more robust and fine-tuned portfolio constructions.

Investing with confidence

How Analytical Portfolio Management enables Limited Partners to make better investment decisions.

Read this article
How Analytical Portfolio Management enables LPs to make better investment decisions