Why HVAC/R Pros Need Corporate Governance Software
A business entity that isn't properly attending to risk management through corporate governance used to be acceptable. It was alright to have business processes that relied on a lot of policies without having enterprise wide subsidiary governance for business conduct.Read More
A business entity that isn’t properly attending to risk management through corporate governance used to be acceptable. It was alright to have business processes that relied on a lot of policies without having enterprise wide subsidiary governance for business conduct.
Now, though, there is more focus on corporate governance enforcement with increased emphasis on ESG. Investors want to know what corporate entities and legal entity types are doing to make sure that they go beyond policies.
To move beyond policies and have a global solution that board members and business users can agree on, it’s important to have the right corporate governance software. Corporate governance software establishes a foundation for everyone from grocery stores with one or two locations to multi subsidiary organizations. Software solutions allow you to have an automated workflow and quality assurance to make sure that your governance is working and that you can manage risk for everyone from the technicians on the ground to executive officers.
Risk Management for ESG
Investors are looking for information about governance when considering decisions. Furthermore, governmental bodies are new stakeholders looking for more information about governance from businesses and practices.
In the US
In the US, legislation and rulemaking that would require disclosures about governance are in the works.
For publicly traded companies, the SEC is moving forward to make certain climate disclosures required. This would include information about governance related to climate information. 100% of HVAC/R units will need to be reported as well, meaning that there will need to be new governance standards between the C-suite and facilities managers working. This information will need to be part of a company’s 10K, making the information material.
For companies making more than $1 billion in revenue and operating in California, SB 260 is making its way through the California senate and is likely to pass. This would require disclosure of Scope 1, 2, and 3 emissions – and while there are no specific disclosures related to the governance of a company, proper governance will be needed to have these documents and the proper data.
For both SEC and SB 260, third parties will have to attest the information.
In the EU
In the EU, ESMA has specific requirements related to what needs to be reported related to ESG. For many of these requirements, companies have the responsibility to create reports that show governance in specific areas.
First, companies much show strategy governance and resilience. This means showing how governance is helping a company be resilient to climate change.
Double materiality is also important to demonstrate. You must be able to measure the impacts your company creates on the climate in terms of both carbon and financial health.
Companies must also report on topic selection process. They must know exactly what environmental obligations they are working toward and be able to report on them.
Targets and goals are also important to have. These must be related to sustainability.
Finally, companies must also pay attention to the non-financial reporting directive, EU sustainability reporting directive, and EU taxonomy law.
All of this relies on having proper governance to both be able to report on this information and be able to manage the data collection process. Having the right corporate governance software is crucial to an organization to be able to provide this information.
Corporate Governance Software Establishes What You Need
With all of these regulations and requirements in place globally, it’s important to have governance to manage responsibilities.
Governance can’t be established without the proper tools, though. This is where software comes in. Passing paper back and forth between departments will only lead to errors in the long term. Access to software is crucial.
The Right Tools in Place
With corporate governance software, you should be able to control and edit access. You should also be able to manage user controls and permissions. There should be rapid deployment of policy updates and a structured processes for all activities. This will create transparency across your team.
Information also needs to be aligned with your needs. This means alignment with EU and US climate disclosure requirements, and the use of IPCC carbon factors. There should also be flexible frequency on reports, as well as alignment with other systems that contain data you need, such as CMMS systems.
Trakref has all of this embedded into its solution, making it a perfect companion to managing corporate governance.
Corporate Governance Software in Action
Trakref has already seen how corporate governance software can help companies streamline their processes and achieve success.
Large Multi-National Company with European Ownership
This company had to report ESG initiatives both in the US and the EU. Like many companies we work with, they had a lot of policies and procedures, but little overarching governance. With Trakref, which offers worldwide coverage, they were able to align business practices and deliver on reporting goals.
Large Grocery Chain
This company needed to meet EPA and shareholder needs for data, and while they had a lot of information in their CMMS system, they didn’t have governance. Using Trakref, they were able to harvest data from their CMMS and provide the reports needed to stakeholders.
Large Multi-National Online Retailer
This client had decentralized data when we started working with them. With Trakref, they were able to harmonize data and report on sustainability goals related to Scope 1 emissions. They were also able to create an auditable carbon balance sheet.
Make Sure You Have the Right Tools
With more regulations and expectations, it’s no longer enough to have decentralized data and policies. Organizations need governance, and everyone needs to be on the shttps://trakref.com/contact-us/ame page.
Trakref helps customers with this everyday. We have the right solution along with the expertise to guide users. Get in touch with us today to ensure you’re on the right path toward governance.
Be sure to join us on July 21 for an open mic on corporate governance for HVAC/R pros. We hope to see you there!
You can also download our handout that covers more about corporate governance.
Gavin is the Lead Writer at Trakref.