Three out of four companies expect a sustainability tool to provide complete reporting

Mandatory sustainability reporting is increasing the pressure on many companies to act. Heterogeneous data sources, poor data quality, and complex regulatory requirements present a major challenge that can only be met with the right tools and a high degree of automation. So far, many companies are still relying on the on-board tools of large software and cloud providers, leaving a lot of optimization potential untapped, as the current "IT & Sustainability - Maturity Index 2023" shows. The study was commissioned by Lufthansa Industry Solutions and conducted by the market research company PAC, which surveyed 150 IT and business decision-makers from the automotive, manufacturing and logistics industries.

Norderstedt, September 5, 2023 - "In order to meet the legal requirements for sustainability reporting, companies have to collect, analyze and prepare a lot of data. The manual handling of these tasks is not only too time- and personnel-intensive, but also very error-prone," says Moritz Röder, Associate Director Supply Chain Management & Sustainability at Lufthansa Industry Solutions (LHIND). For the "IT & Sustainability - Maturity Index 2023", LHIND has therefore defined a sub-index for the area of "tooling". The sub-index takes into account whether companies use tool-supported and automated processes to produce their sustainability report, whether they conduct a risk assessment of their suppliers, and which tools they use to do so. On a scale of "0" (immature) to "10" (mature), the subindex scored 6.4. "The index shows that companies are already working intensively on the issue of sustainability and the necessary tools," says sustainability expert Röder.

The index shows that companies are already working intensively on the issue of sustainability and the necessary tools

Moritz Röder
Associate Director Supply Chain Management & Sustainability at Lufthansa Industry Solutions

And what does such a tool do from a company's point of view? In addition to calculating the carbon footprint (93 percent), 82 percent of those surveyed want support in making sustainable purchasing decisions and 78 percent want complete sustainability reporting. For 70 percent, understanding the status quo is important to improving sustainability, and 61 percent expect a holistic view of financial and sustainability KPIs.

Only 15 percent of companies have automated their sustainability reporting

So far, one in two companies surveyed for the study already produces a sustainability report - either voluntarily or because it is required by law. Four out of ten of these companies still do this manually, with varying degrees of support from a reporting tool. 44 percent of the companies already produce their report at least partially automatically. They often use sustainability monitoring tools that are already established in the enterprise as part of the software portfolio of large software or cloud providers. However, only 15 percent of companies have automated their reporting to a large extent. Moritz Röder: "Contrary to what the sub-index suggests at first glance, there is still considerable potential for optimization.

The same applies to supplier risk assessment. Two-thirds (67 percent) of companies already conduct a risk assessment of their suppliers' sustainability, and another 26 percent plan to do so. Less than one-third of these companies have automated this process to a large extent. In contrast to sustainability monitoring, specialized tools are usually used to assess supply chains. LHIND consultant Röder: "To improve their own maturity and drive automation, companies need not a bouquet of different tools, but a single source of data truth. A tool that guides them step-by-step through reporting and at the same time ensures transparency in the supply chain."

To improve their own maturity and drive automation, companies need a tool that guides them step-by-step through reporting and at the same time ensures transparency in the supply chain.

Moritz Röder
Associate Director Supply Chain Management & Sustainability at Lufthansa Industry Solutions

To avoid unpleasant surprises when implementing the tool, companies should also make sure that it is in line with process governance and reporting guidelines, and that it can be adapted to both financial requirements and future organizational structures. "If these requirements are met, such a tool will ultimately enable the data-driven sustainability management that companies need to achieve their climate goals," says Moritz Röder.

As a digital centerpiece for sustainability management, LHIND has developed the cloud-based solution EPACTO (ESG Performance Accounting Tool). EPACTO brings together all relevant data, calculates the current sustainability performance of the company and shows a development path towards planetary impact limits. Learn more about data-driven sustainability management with EPACTO.

The study "IT & Sustainability - Maturity Index 2023" can be downloaded here.