Rovensa

Our reporting challenges have to do precisely with our being spread over multiple locations. We have a presence in more than 40 countries, on different continents, from Latin America to Asia. These countries are at different stages of maturity as regards ESG, and so the same is true of our companies.

Highlighting what have been the three main difficulties:

1. CONSISTENCY IN DATA COLLECTION
   
   (Un)availability of data and inconsistencies in metrics and/or assumptions:
   Different regions or business units may face varying levels of difficulty in providing us with ESG data. And their assumptions normally differ from those of the reporting requirements. Why is this? There are metrics which can be measured in different ways depending on local legislation, cultural differences and/or the different levels of maturity of Group companies. This inconsistency raises a number of issues when aggregating data at global level and in harmonising the assumptions underlying reporting indicators within the Group.
   
   Manual data collection system:
   The fact that we don’t yet have a management system that enables digitisation of ESG data is an obstacle, especially when calculating the carbon footprint It ends up being a technological barrier that limits our ability to report data with greater accuracy and thereby achieve better strategic decision-making.
   
   
2. DIFFERENT STAGES OF MATURITY AS REGARDS EGS
   
   Different levels of maturity:
   The different Group companies are at different stages of ESG maturity and sometimes have difficulty in aligning themselves with corporate ESG goals. This leads to some companies needing more training and our support to be able to respond to current reporting requirements, and to some trade-offs having to be made when gathering data.
   
   ESG agendas differ across countries:
   ESG priorities differ significantly from country to country, around the world. For instance, environmental concerns may be the priority in one region, but not in another. We can point to the case of renewable energy, which in Europe is at the top of the agenda, whilst in Mexico the state retains a high degree of control over the electricity market. This makes unified ESG storytelling a challenge.
   
   
3. DATA INTEGRATION AND AGGREGATION
   
   Complex data integration:
   Integrating ESG data from several companies in a global report is a complex task, especially when dealing with differences in data sources, formats and levels of detail.
   
   Aggregation challenges:
   Aggregating data from several companies in different countries without losing regional/local nuances is a delicate balancing act. Last year, in one of the social indicators, we identified a discrepancy in a figure that was based on the minimum wage. And we later realised that the gap was because, in that country/region, wages were paid weekly, and not monthly as is generally the case in Europe. Being a multi-regional group forces us to give up our "Eurocentric" vision of the world and familiarise ourselves with regional nuances, so that nothing gets lost when the data is aggregated.
   

Our partnership with KPMG is now three years old, and has been crucial to the progress in our reporting process. By working closely with us and staying focused on our needs, KPMG has helped us at different stages with an essential toolkit for achieving greater maturity and consistency in our reporting.

In particular:

Mapping out ESG owners of information, data sources, identifying our internal control processes, evidence. This initial exercise helped to centralise ESG information, overall, and facilitated the subsequent limited assurance process.

Dedicated reporting sessions with ESG owners of information. Whenever necessary, the KPMG team has been ready to provide small training sessions to ensure that all our owners of information share the same assumptions and a correct understanding of what is required in the reporting indicators, listening to and always incorporating the different regional nuances.

Recommendations for continuous improvement in the data collection forms and support manuals. Over the past few years we kept a record of the most frequently asked questions and co-created with KPMG two manuals to help with collecting ESG and carbon footprint information, which we then distributed internally when we kicked off the reporting process.

Calculation of the carbon footprint is fundamental for measuring our performance and identifying areas for priority focus. When we finish calculating our carbon footprint we usually have a meeting with the different operational divisions to discuss performance, identify our hotspots and what can be done to improve them, in alignment with our Net Zero Roadmap. Our target is to halve our emissions by 2030. So it is crucial to measure and adjust our action plan, whenever necessary, in order to achieve the Group’s overall goal.

The same rationale applies to the different social and governance indicators. When we consolidate these data, we are able to pinpoint the areas where we should be focussing, and those which need more work in the short term. Without consolidating non-financial data, it’s not possible to manage sustainability, or to ensure improved performance. The fact that the new European reporting directive – the CRSD – requires management reports to include non-financial information will cement the tendency for sustainability to be placed at the heart of the business strategy and the operating model.

Very briefly, I would say that these companies should focus on three things:

(1)    People: create a clear reporting governance structure with people in charge of data/information and clearly defined and demarcated responsibilities. Sustainability is a responsibility shared with those who most provide the data. The owners of information must be responsible for managing it and improving their performance. To complement this, I suggest regular training for these owners of information, so that they have a clear understanding of all the current reporting requirements and of their importance to the financial sustainability of businesses.

(2)    Processes and controls: have manuals with clearly defined procedures for collecting and managing non-financial information (Sustainability Reporting Workflow); centralise non-financial information and harmonise assumptions across the organisation.

(3)    Systems: automate the data collection process as far as possible so that it doesn’t rob companies’ time and/or turn their focus away from what’s most important: mobilisation for action. Good IT architecture, which enables the integration of different digital systems within companies, can help free up time for more detailed analyses, ultimately supporting better informed decision-making by the companies’ management bodies.