How Can Businesses Engage in SDG Reporting While Minimizing the Costs Associated with Data Collection?

 Businesses increasingly recognize the importance of reporting their progress on Sustainable Development Goals (SDGs) to demonstrate accountability and commitment to sustainable practices. However, the process of collecting and reporting data on SDG-related activities can be costly and resource-intensive. Fortunately, there are several strategies businesses can adopt to engage in SDG reporting effectively while minimizing the costs associated with data collection.

1. Leverage Existing Data and Integrate with Internal Systems

One of the most effective ways to reduce the cost of data collection is to make use of existing data sources within the company. Many businesses already collect data for other purposes, such as financial reporting, environmental monitoring, or human resources management. By integrating SDG-related metrics into these systems, businesses can streamline the reporting process and reduce the need for additional data collection efforts.

Actions to Take:

• Integrate SDG metrics into existing KPIs: Align SDG-related indicators with the company’s Key Performance Indicators (KPIs). This way, businesses can leverage data they already collect, such as energy consumption, employee diversity, and supply chain efficiency, without incurring additional costs.

• Automate data collection processes: Use technology to automate data collection through software or sensors in areas like energy use, waste management, and employee welfare. This reduces manual effort and the associated costs.

By aligning SDG reporting with pre-existing systems, businesses can minimize the costs of gathering new data while ensuring that they meet their reporting obligations.

2. Use Industry Benchmarks and Third-Party Data Sources

Collecting data directly from every aspect of the supply chain, operations, and product lifecycle can be expensive. However, businesses can reduce costs by using publicly available data and industry benchmarks for certain SDG metrics. Many organizations and agencies provide standardized data that companies can adopt for comparison and reporting.

Actions to Take:

• Use global reporting frameworks: Leverage internationally recognized reporting frameworks like the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), or the CDP (Carbon Disclosure Project), which often provide sector-specific guidelines and data benchmarks. These frameworks help businesses align their reporting with global standards and reduce the costs associated with collecting detailed data from scratch.

• Partner with third-party data providers: Use data provided by third-party organizations that track SDG-related progress, such as environmental or social performance. For instance, businesses can rely on organizations like Global Peace Index or World Bank indicators to access reliable data for SDG 16 (Peace, Justice, and Strong Institutions) without incurring the costs of direct data collection.

By utilizing external data sources, businesses can report on SDGs without incurring the high costs of gathering all the information in-house.

3. Collaborate with Industry Groups and Peer Networks

Businesses can collaborate with industry groups, associations, and peer networks to share the costs of data collection. Many industries have established sustainability initiatives or partnerships where data is collected collectively and shared among members. This approach reduces individual company costs and ensures that data collection is consistent across the industry.

Actions to Take:

• Join collaborative sustainability initiatives: Participate in industry-wide sustainability initiatives where companies pool resources to collect and analyze data for SDG reporting. For example, some industries share data related to carbon emissions, water usage, or labor conditions to reduce the reporting burden on individual businesses.

• Benchmarking and peer comparisons: Engage with peer businesses to benchmark performance against common SDG targets. Sharing knowledge and resources allows businesses to minimize costs and avoid duplicating efforts. For example, supply chain transparency initiatives can help multiple companies track social and environmental impacts without investing heavily in individual assessments.

Collaborating with industry peers allows businesses to reduce individual reporting costs while gaining valuable insights from collective efforts.

4. Focus on Materiality and Prioritize Key Metrics

Instead of attempting to report on all SDG targets, businesses can reduce costs by focusing on the most material SDGs that align with their core activities. Materiality assessments help businesses identify which SDGs are most relevant to their operations, stakeholders, and long-term strategies. Focusing on the most critical SDGs allows businesses to prioritize data collection efforts and avoid unnecessary or expensive reporting on less relevant goals.

Actions to Take:

• Conduct a materiality assessment: Evaluate which SDGs are most relevant to your business based on industry, geographic location, and stakeholder expectations. Prioritize reporting on SDGs that have the highest impact on your operations and that align with your business objectives.

• Reduce the scope of reporting: Rather than attempting to collect exhaustive data for every SDG target, focus on the most significant and achievable targets within your organization’s scope of influence. This ensures that resources are dedicated to the most impactful areas.

By narrowing the scope and focusing on material SDGs, businesses can streamline the reporting process and reduce the costs associated with collecting less relevant data.

5. Utilize Open-Source Tools and Platforms

Several open-source tools and digital platforms can assist businesses in collecting and reporting SDG data at a low or no cost. These tools help automate the reporting process, standardize data collection, and facilitate the integration of SDG performance into a company’s existing systems.

Actions to Take:

• Use free SDG reporting tools: Leverage platforms like Sustainability Tools, SDG Compass, or Impact Measurement Platforms to automate and streamline SDG reporting. Many of these tools are available at no cost or for a minimal fee and offer templates, reporting frameworks, and data tracking features.

• Adopt open-source software: Implement open-source software to track data on sustainability indicators, including carbon emissions, waste management, and social impact. These tools can integrate with other business management systems and reduce the need for expensive, proprietary solutions.

Open-source platforms offer businesses a cost-effective way to monitor, track, and report on their SDG progress.

6. Engage Employees and Stakeholders in Data Collection

Incorporating data collection into day-to-day operations can help reduce costs and ensure that the information is accurate and relevant. Engaging employees and other stakeholders in the reporting process can make data collection more efficient and reduce the need for external resources.

Actions to Take:

• Involve employees in data gathering: Encourage employees at all levels of the organization to contribute to SDG data collection. For example, staff could help track energy consumption, waste production, or diversity metrics. Involving employees can reduce the costs of hiring external consultants or dedicating significant resources to data collection.

• Incorporate stakeholder feedback: Engage stakeholders, including customers, suppliers, and local communities, in data collection processes. For example, businesses can collect feedback through surveys, interviews, or community meetings to assess social impact or gauge satisfaction with sustainability initiatives.

Employee and stakeholder involvement ensures that businesses can collect relevant data at a lower cost and fosters greater ownership of SDG initiatives.

7. Outsource Data Collection Strategically

If a business does not have the internal capacity to collect and analyze SDG data, outsourcing can be a cost-effective solution. By working with specialized agencies or consultants that have the expertise and tools necessary to collect accurate SDG data, businesses can avoid the costs of training staff or developing in-house systems.

Actions to Take:

• Outsource non-core data collection: For specific SDG-related data, such as environmental impact assessments or human rights audits, businesses can partner with external consultants or agencies that specialize in sustainability reporting.

• Choose flexible, scalable services: Outsource data collection to agencies that offer scalable services, which can be adjusted based on the size and complexity of the business’s reporting needs.

Outsourcing provides access to expertise without the high upfront costs of setting up internal systems.

Conclusion

Engaging in SDG reporting doesn’t have to be a costly endeavor. By leveraging existing data, collaborating with industry peers, focusing on material SDGs, using open-source tools, and strategically outsourcing certain tasks, businesses can minimize the costs associated with data collection while still fulfilling their reporting obligations. These strategies ensure that businesses can demonstrate their commitment to sustainability and SDG progress without overburdening their resources.