Leveraging Technology to Navigate the Complexities of ESG and Financial Reporting

Managing financial reporting in a time of ever-increasing mandates is no simple task as requirements push companies to measure and analyze their performance in new ways. However, reporting on these areas should be a priority for companies not only because of regulatory requirements, but also the potential to drive business value with the increasing public focus on sustainability. 

But, confronting the difficulties in measuring and reporting on the increasing amounts of data requires the right tools and significant planning. Fortunately, it can become manageable for any company. We recently faced these challenges, but eventually the goal of exceeding these reporting expectations was met. By implementing a unified reporting process, we reduced our close time from ten days to four while becoming more capable and productive through increased collaboration across teams. 

Here are a few more benefits we experienced and how your business may do the same.

Reduced Reporting Time

Reducing reporting time is increasingly important as companies begin to manage more reporting requirements in the US, with new mandates by the SEC and in California, and globally, with the CSRD mandates in the EU. Existing reporting workflows are largely unfit to handle the amount of information being processed with new regulations. Even companies that manage to maintain their workflows for the next few years will be out of luck when requirements increase. It’s important to begin developing new processes now to ensure that companies have ample time to integrate internal policies and stress tests before a mistake happens, which often comes with costly repercussions. One of the largest factors in reporting time is software, but consistency in platform and leveraging software that can work across different areas of the organization can significantly reduce a company’s overall reporting time.

Investing in training and upskilling is another way to help establish departments that can scale with reporting requirements. Employee upskilling is essential as a company prepares its workforce to tackle these challenges. As companies aim to grow in their reporting and sustainability efforts, they need to provide staff with the tools to help get them there. But while allowing staff to focus on more strategic items will help bring understanding, companies must give employees the tools they need to succeed within growing time constraints. Leveraging technology will be key in helping teams meet rising demands in the same reporting windows.

It’s important companies look to the future right now and take steps to future-proof reporting processes. Reducing reporting time and upskilling not only gives companies the ability to scale reporting with growing requirements -- it also creates more cost effective and productive departments. 

Integrated and Collaborative Strategies

Few things are more important than collaboration when it comes to reporting within a large company. At Playa Hotels & Resorts, we report on various metrics from teams across multiple global locations and languages. To effectively scale reporting, it was necessary to ensure that lines of communication were built up so Playa’s internal audit team, and external auditors could align on reporting efforts. In many ways, this was easier said than done. 

Cloud software has been critical to enhancing the ability to work together in real-time. This implementation has helped us increase the accuracy of our reporting efforts and eliminate version control issues while simultaneously building a more cohesive and open work environment for employees. 

Financial reporting requires an understanding of every department in a company since all aspects of operations ultimately translate into numerical data. Familiarity between these departments aids in the speed and confidence of communication, which is critical to a company’s reporting success. Collaborating with partners, mentors, and peers across an organization builds better professionals, and better professionals build a more efficient and effective reporting team. 

Enhanced Efficiency through Integrated Reporting

A well-trained team is only effective when the software environment they are working in can support them. Therefore, a robust reporting platform is necessary for a company to meet rising reporting needs. As with many of the ideas above, this is a proactive measure that will help prevent a company from feeling strained when future requirements come into effect. A unified platform goes beyond recording data; it allows a company to integrate data across departments, transform data, and automate processes and reporting. These extra capabilities offer companies huge opportunities as nine in 10 executives say integrating financial and ESG reporting presents a more holistic view of performance and value to stakeholders, and 85% agree that integrating financial and ESG/sustainability reporting makes it easier to comply with regulatory reporting requirements, according to new data.

During our journey to go public, we took a “three lines of defense” approach in collaborating with PwC and our software partner Workiva. The workflow ensured that reporting on SOX compliance, SEC reporting, and ESG was integrated and aligned. The first line of defense was a preparer and reviewer, the second a quality and risk department to implement spot-check audits, and the third our own internal audit team. Workiva’s software platform facilitates communication between these lines and ensures they’re in sync and able to function effectively. Leveraging a unified reporting platform has continued to be essential to modernizing and increasing efficiency. 

As companies look ahead, it’s important to recognize what changes are coming. Whether it’s new regulations or evolving technologies, those that effectively weather will begin thinking about what tools they can use to gain an advantage as they prepare now. Integrated reporting, upskilling teams, and building paths of collaborative communication are all mission-critical in preparing for what comes next.