Background
In the current business landscape, Environmental, Social, and Governance (ESG) reporting is a crucial component of a company’s sustainability strategy. ESG reporting is not just a matter of compliance; it’s also a tool that enables companies to better align their goals with global sustainability practices.
In a previous article, we looked at ESG in Finance and the Role of Code Optimisation. In this article, we look at the administrative aspects of implementing company ESG policies, including understanding ESG reporting. We will also explore how Artemis AI and its code optimisation results can help companies speed up ESG reporting.
Understanding ESG Reporting
Let’s briefly look at the components of ESG reporting:
1. Environmental: This category evaluates a company’s impact on the environment, including its energy consumption, greenhouse gas emissions, water usage, waste management, and overall environmental footprint. Companies must quantify their efforts to reduce their environmental impact to meet ESG goals.
2.Social: This category examines a company’s treatment of employees, community involvement, diversity and inclusion efforts, and human rights practices.
3.Governance: Governance encompasses corporate policies, leadership structure, board diversity, and ethical business practices.
Artemis AI’s most significant contribution is towards the environmental pillar of ESG.
Key environmental reporting standards in the UK
Here are four key environmental reporting standards implemented in the UK:
1.UK Sustainability Disclosure Standards: UK Sustainability Disclosure Standards (SDS) sets out corporate disclosures on the sustainability-related risks and opportunities that companies face. They form the basis of the requirements in UK legislation or regulation for companies to report on risks and opportunities relating to sustainability matters, including risks and opportunities arising from climate change.
(More details at: UK Sustainability Disclosure Standards)
2.Streamlined Energy and Carbon Reporting (SECR): From financial years beginning on or after 1 April 2019, large UK companies have been required to report publicly on their UK energy use and carbon emissions within their Directors’ Report. Not all companies are required to disclose this information. Figure 1 below is helpful to determine whether a company is required to disclose information on energy usage and carbon emissions:
Figure 1: Guidelines to determine whether it is necessary to disclose energy and carbon information.
Recreated from gov.uk environmental reporting guidelines
3.Climate-related financial disclosures for companies and limited liability partnerships (LLPs): Companies that exceed turnover and number of employees threshold are required to disclose climate-related financial information to help support investment decisions. (More details at: Mandatory climate-related financial disclosures by publicly quoted companies, large private companies and LLPs)
4.Energy Savings Opportunity Scheme (ESOS): ESOS is an energy assessment and energy saving scheme and is established by the Energy Savings Opportunity Scheme Regulations 2014 (ESOS Regulations).The scheme applies to large undertakings and groups containing large undertakings in the UK. (More details at: Comply with the Energy Savings Opportunity Scheme (ESOS))
Artemis AI for ESG reporting
Artemis AI is a state-of-the-art automated code optimisation platform developed by TurinTech AI. Artemis AI enables companies to meet and report their ESG environmental goals in multiple ways:
1.Energy efficiency: Artemis AI is capable of optimising code bases in a matter of minutes, resulting in more efficient software. As energy consumption often correlates with software efficiency, implementing Artemis AI can lead to significant energy savings. This reduced energy consumption directly aligns with ESG goals to minimise environmental impact. In addition, Artemis AI provides companies with energy savings figures of optimised code bases which can be directly used in reporting, without having to conduct manual in-house calculations.
2.Carbon emission reduction:
The Greenhouse Gas (GHG) Protocol defines three scopes for GHG accounting and reporting purposes. Scope 1 covers direct GHG emissions, scope 2 covers emissions from the generation of purchased electricity consumed by the company, and scope 3 covers other indirect emissions. By optimising code, Artemis AI helps companies reduce the computational load on servers and data centers. This results in lower carbon emissions associated with data processing and storage, as well as running software, directly contributing to the reduction of scope 1 and scope 2 emissions of a business. Code optimisation may also lead to reductions in scope 3 emissions, for instance by reduction of emissions in products sold. Artemis AI also provides CO2 reduction percentage and energy consumption metrics of optimised code, which companies can use to demonstrate their commitment to sustainability in their ESG reports.
3.Data-Driven reporting: In a business climate where greenwashing is becoming more and more of a concern, Artemis AI’s data-driven approach provides companies with reliable energy consumption and carbon emission metrics. This data can be integrated directly into ESG reporting, making it easier for companies to track and report ESG progress while positioning themselves as a credible organisation with a serious commitment to ESG.
Final thoughts
Companies need innovative and credible solutions to expedite their journey towards sustainability and compliance with ESG principles. TurinTech’s Artemis AI is one such solution that not only improves energy efficiency and reduces carbon emissions of software but also streamlines the reporting process. Incorporating Artemis AI into your company technology stack can help you demonstrate your commitment to environmental sustainability and reliable and streamlined ESG reporting.
