Microsoft Excel turned 40 in October. But this game-changing package is no longer at the bleeding edge of its sector. We take a crash course in contemporary software and how this might help the planet.
For decades, companies have relied on spreadsheets to track complex, dynamic data – from finances to carbon footprints. But as powerful as Excel is, in today’s world, businesses are starting to turn to more modern systems that are collaborative, automated and auditable to help drive credible climate progress.
The limitations of spreadsheets
There’s no doubt about it, the functionality of Excel has been revolutionary. Transforming data management and making complex numerical analysis accessible to everyone paved the way for more sophisticated reporting across the largest of organisations. Yet, as impressive as this functionality remains to be for certain applications, the world we now find ourselves in is very different to the one when Excel was created.
One of the biggest challenges of ESG teams is overall the reliance on manual data input. In instances where automated calculations are set up in spreadsheets, one small mistake can set off a string of errors that distorts the organisation’s entire profile. In the case of ESG, where the likes of the Corporate Sustainability Reporting Directive (CSRD) are starting to enforce obligatory reporting, this can leave businesses in breach of compliance but also paint a false picture of their efforts.
Data management is suffering
Now more than ever, global regulations demand traceable, auditable data, but when spreadsheets are scattered across departments, lost in a sea of countless versions, it becomes a lot harder for ESG teams to manage. They’re left struggling to access siloed data from multiple internal departments, like finance, HR and procurement, as well as their third-party suppliers. Such embedded siloes make reporting especially challenging, as ESG teams rely on each department sharing the necessary information upon request – which is rarely instant. Considering this exercise has to then be repeated several times in a year, frustration levels across the business can rise very quickly.
Multiple spreadsheets also create issues around accountability. When the relevant documents arrive in the ESG team’s inbox, they lack any visibility into the data’s origin, who’s responsible for what and have no guarantee of its accuracy. Instead, having full transparency of where datasets come from and who owns them helps drive greater accountability across the different departments, so that ESG teams are confident that the data used for reporting against regulatory requirements paints an accurate picture of the business’ performance and is robust enough to stand against rigorous audits.
Switching to modern alternatives in the right way
In the move away from spreadsheets, the natural default has typically been to invest in new technology whenever the moment calls for it. It’s quickly become the standard practice to layer tool upon tool, leaving teams with tens of tech platforms all supposedly doing a different job, none of them talking to each other, creating endless inefficiencies and unnecessary cost.
ESG teams are the key drivers of making sustainability a source of true business growth, and they’re doing so in the middle of an increasingly shifting market. They need accurate and reliable data at the drop of a hat.
Consolidating everything into a complete system of record arms these teams with the means to adhere with regulations while also injecting sustainability into overall business strategy. Giving them everything they need at their fingertips – without relying on input from outside departments – takes away the relentless headaches of data management and reporting. It gives teams greater control, empowering them to make proactive, informed decisions aligned with the business growth strategy.
Learn from the past
This type of transition has already taken place once before, when finance teams made the leap and left the familiarity of Excel for more modern alternatives. There’s a lot that can be taken from the evolution in financial reporting and applied directly to ESG.
If we think back to the 1970s, financial data was once scattered across spreadsheets and reliant on manual input which posed significant risk of human error and general inaccuracies. While that’s no longer the reality for most finance teams today, we know the same can’t be said for ESG, who continue to battle with siloed data, manual reporting processes and reliance on multiple functions sharing information in a fast and proficient manner.
Opening up clear communication channels between finance and ESG teams is therefore a strategic move for businesses, to learn from each other’s experiences and drive greater commercial success. As with most business functions, ESG teams are constantly under pressure to demonstrate genuine business value, or otherwise be labelled a cost centre. So to truly embed sustainability into core business strategy, it’s essential to connect ESG data with financial data, which starts with better alignment between departments. This shift therefore makes demonstrating the ROI of sustainability initiatives far more achievable as it will get the necessary stakeholders bought in from the very beginning.
What should businesses do next
Given that ESG requirements are taking up more paper space in public and private contracts – sometimes as much as 10–20% – there’s a real need for businesses to optimise their data management processes, as new revenue opportunities are quite literally on the line. So as organisations demand greater transparency and evidence of regulatory adherence, those who weave ESG metrics into business strategy will be in a stronger position to respond.
By taking action now, organisations can build a robust foundation for the next phase of ESG data management. When Excel first launched in 1985, its transformative capabilities shaped business processes across the board. But given that the next 40 years of sustainability reporting will look nothing like the time now passed, businesses need to take the necessary steps to future-proof ESG strategies moving forwards.
Image: Mika Baumeister / Unsplash
Juanjo Mestre is Co-founder and CEO of Dcycle, a specialist in sustainability report and analytics.
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