Aligning sustainability with strategy: Oracle Cloud EPM for ESG Reporting

September 30, 2024 | 4 minute read
Wayne Heather
EPM Product Marketing Director, Oracle
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As mentioned in the previous blog in this series, Navigating the Labyrinth: The Complexity of ESG Data Collection, despite the challenge of having to collect all the data for Environmental, Social, and Governance (ESG), getting a handle on your ESG data can help identify areas of business opportunity and growth. Therefore it is no surprise that the CFO is moving to take the lead in ESG initiatives, not only sharing their organization's ESG achievements but also developing ESG strategies around stakeholder interests. To accomplish this, CFOs must look at aligning ESG initiatives with business strategy. To do this, ESG reporting should be integrated into the financial reporting process with visibility across financial and ESG performance.

With thousands of customers relying on Oracle Cloud Enterprise Performance Management (EPM) as the guiding compass to steer their businesses through ever changing economic and geo-political uncertainty, it is no surprise that EPM is also the perfect choice to help them navigate the challenges of focusing on planning for, monitoring and reporting on their ESG initiatives. As companies increasingly recognize the importance of integrating ESG objectives into their core strategies, Oracle Cloud EPM stands out as a tool uniquely suited to this task.

Over the years, EPM has evolved to become the de-facto standard for financial reporting processes, finding its mark as the critical single source of truth for both regulatory/statutory and management reporting. The ability to ingest data from any source, and then model that data provides the bedrock foundation needed to provide verifiable and reconcilable information.

It is natural then to turn this technology to address the Sustainability and ESG Reporting and Planning requirements.

Oracle Cloud EPM: A convergence of finance and sustainability

With companies fighting to gain mindshare and consumer confidence around their sustainability goals, they sit with the challenge of making sure the sustainability initiatives make business sense. Finance has used Oracle Cloud EPM to collect, transform, aggregate and report on data for years. Therefore, Oracle Cloud EPM is ideally placed to help collect ESG data through a controlled and auditable process. It helps align ESG plans with finance and operational plans, and communicate ESG performance to all stakeholders, including reporting to regulators across multiple frameworks. As mentioned, Oracle Cloud EPM has been proven as a leader in doing such for financial regulatory reporting for many years and is a proven platform for such regulatory needs.

Oracle Cloud EPM for Sustainability is a purpose-built solution for customers to rapidly gain control and compliance over their ESG reporting responsibilities. Oracle Cloud EPM for Sustainability is a comprehensive platform that aligns ESG goals with financial and operational plans. Here’s how it excels in this role:

  • Robust Data Management: The platform excels in handling vast and diverse data sets, crucial for ESG reporting. It allows companies to track their sustainability metrics with the same rigor as financial data, ingesting data from the variety of sources required for ESG. Some companies will need to disclose as many as 1,000 discrete items, depending on their materiality determinations and all companies within the scope of CSRD will need to report on ESG performance based on their adherence to 12 European Sustainability Reporting Standards. Then add in the recently approved SEC mandates around ESG disclosures, you can imagine the vast amount of data that needs to be collected to support these requirements. The strength of Oracle Cloud EPM is that it is proven to ingest data from any source, through business owned and mapped processes, providing end to end auditability and reconciliation of the information.
  • Integrated Planning: Oracle Cloud EPM enables businesses to merge their ESG targets with financial and operational strategies. This integration ensures that sustainability goals are not just aspirational but are embedded in every business decision. Plans cannot be done in isolation, both the financial and sustainability impacts need to be addressed, ensuring that initiatives are meeting all key criteria.
  • Modeling and Forecasting: Crucial for ESG strategy, Oracle Cloud EPM offers advanced modeling capabilities allowing companies to forecast the impact of various sustainability initiatives, aiding in effective decision-making and resource allocation.
  • Alignment with Financial and Operational Goals: By integrating ESG goals into the core planning and forecasting processes, companies ensure that their sustainability objectives are in tandem with financial and operational strategies. For example, what capital or operational expenditure and projects do we need to plan for to ensure we meet our Net Zero targets? How does that impact P&L, balance sheet and cashflow?
  • Performance Tracking: The tool provides real-time tracking and analytics, essential for monitoring ESG performance against set goals and enabling businesses to stay on course and make necessary adjustments.
  • Reporting and Compliance: With Oracle Cloud EPM, companies can produce detailed ESG reports that align with global standards such as ESRS/CSRD/GRI/IFRS etc., ensuring compliance and transparency for stakeholders.
  • Scalability and Flexibility: As ESG reporting standards are continuing to evolve, Oracle Cloud EPM's scalable and flexible architecture allows companies to adapt quickly, ensuring they remain compliant and relevant. With business-owned processes and capabilities, this can be rapidly deployed without the need for extensive re-development and maintenance.
  • Informed Decision Making: The platform provides insights that go beyond compliance, aiding in strategic decision-making and long-term value creation, essential in today's ESG-conscious business environment. EPM provides insights on data, using pattern recognition engines to highlight areas of the data that should be investigated; this is important for data that we are less familiar with.

Conclusion

Oracle Cloud EPM stands at the forefront of aligning sustainability with corporate strategy. It transforms ESG reporting from a mere regulatory requirement into a strategic asset, enabling companies to weave their sustainability goals seamlessly with their financial and operational objectives. In the journey towards sustainable business practices, Oracle Cloud EPM is more than a tool; it’s a catalyst for change.

Learn more about Oracle Cloud EPM for Sustainability.

Wayne Heather

EPM Product Marketing Director, Oracle


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Navigating the labyrinth: The complexity of ESG data collection

Wayne Heather | 4 min read

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