Finance and data analysts can become key enablers for a sustainable future - here's how

While the need for swift climate action is evident, progress is lagging.

We can expedite change by harnessing enterprise resource planning (ERP) systems and the expertise of accountants and data analysts. ERP data holds immense potential for businesses to contribute to sustainability and fast-track our path to a greener future. This shift requires finance departments to play an increasingly critical role in sustainability management.

Businesses strive to bridge the gap between environmental aspirations and tangible actions. By treating greenhouse gas emissions as a resource type and accounting for the business costs associated with producing carbon, organizations can make the decisions required to achieve their climate goals and ESG targets.

In the future, we will no longer consider carbon and financial accounting separate. That change starts today by seamlessly integrating sustainability into financial processes through transactional carbon accounting. This means tracking carbon more precisely and controlling it using actual data values across business operations and supply chains in sync with financial flows.

And, the unsung heroes of this transformation? The finance experts and data analysts who are poised to take centre stage in the next two decades.

With cutting-edge solutions and a new mindset, finance and sustainability experts, as well as data analysts, can make carbon accounting a reality and advance profitable and low-carbon sustainable business transformation.

Conventional carbon tracking tools often fall short, however. Relying on spreadsheets and semi-automated methods that yield generic averages will not suffice. These outdated tools consume valuable employee time and result in inaccuracies, leading to overestimation and consequently excessive expenditures over time.

That’s why businesses need sophisticated carbon accounting systems that mirror the rigour of financial accounting. These systems should enable them to:

Organizations can set comprehensive targets to holistically steer their business to achieve sustainability goals, monitor progress with reliable data and build trust with auditable ESG reporting to global standards.

Obtain auditable and transparent data, which represents actual carbon outputs rather than aggregated averages, at the corporate, product and transactional levels.

Complete visibility into scope 1-3 emissions forms the basis for accurate net-zero targets and informed decision-making. To achieve a carbon-neutral supply chain, companies need the ability to request and share carbon data across the entire value chain.

By leveraging the power of data embedded in ERP systems, businesses can sync financials with carbon emissions in a single ledger and seamlessly embed sustainability into their core business processes.

The end goal is a 'Green Ledger' that integrates financial data and non-financial ('green') data. The Green Ledger will empower companies to make well-informed decisions, considering both economic and environmental factors at various stages throughout a business process.

It also serves as a rallying cry for corporate culture change. Encouraging all departments within a business to adopt a broader view of resources that encompasses monetary assets and carbon emissions requires more than technical capabilities. It necessitates engaging key stakeholders — employees, customers and investors — in a transformational journey.

While finance plays a central role, ESG reporting cannot be the sole responsibility of a dedicated department. A collaborative approach makes sustainability a top priority across the entire business. For this reason, the Chief Sustainability Officer and the Chief Financial Officer need to work more closely together than ever before.

Achieving a Green Ledger goes beyond real-time dashboards. It involves implementing the right tools today and laying the groundwork for the future, extending these capabilities over time. The unsung climate heroes will harness the power of data embedded in ERP systems so we can usher in a new era of environmental stewardship.