ESG data collection and reporting processes are still a “work in progress,” according to a new survey released by professional services firm Ernst & Young LLP (EY US) and non-profit research group the Financial Education & Research Foundation (FERF), which indicated that 55% of companies are housing ESG data in spreadsheets, and the collection and reporting of ESG information remains a highly manual process.

For the study, “How finance professionals are helping to advance ESG reporting,” 72 chief accounting officers and controllers from some of the largest US companies were surveyed, and interviews were also conducted with financial executives from eight public companies representing the surveyed group.

The survey comes as companies are facing growing pressure from investors, regulators and other stakeholders for transparency on their multiple ESG factors, including environmental impact, diversity and inclusion, and human rights, among several others, and as issuers in the U.S. prepare to comply with climate reporting requirements recently proposed by the SEC.

As reporting requirements increase, however, procedures, systems and policies to collect and manage ESG data remain in relatively early stages. According to the study, only 8% of survey respondents reported that their companies had a relatively complete set of procedures in place to drive a consistent application of ESG data, and less than half reported having tools in place to facilitate a review process around ESG information.

ESG data collection and management appears to remain a highly manual process, according to the study, with only 25% of respondents reporting that their companies’ ESG information currently resides in ESG-specific software or in software solutions used for financial reporting, and over half storing the information in spreadsheets. Asked to rank the level of automation of current ESG reporting processes, respondents gave an overall score of 3.5 out of 10.

While ESG data collection and reporting processes appeared to be relatively early-stage, however, respondents reported that work on advancing the systems and working towards more mature models was taking place. Roughly two thirds of respondents reported having dedicated “substantial time and effort” over the past year to address ESG data collection, aggregation and disclosure, with over half saying that they have increased efforts significantly compared to prior years. Similarly, 97% expect their finance teams to spend more time over the next 12-18 months to address ESG data collection and governance. Respondents also reported that they expect increased automation to come over time, as processes and tools become more developed, comparing ESG reporting to the more established state of financial reporting.

The report also examined the roles that finance professionals are playing in their company’s ESG reporting initiatives. While the report found that Chief Sustainability Officers were the most-often reported as having principle responsibility over the ESG reporting process (45% reported), finance professionals are also being relied upon to support ESG reporting efforts, with 60% being either highly or moderately involved.

Click here to access the study.