Electrex - Why Energy Management is Crucial for Effective ESG Reporting

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ESG and energy management are essential for modern businesses, as they not only ensure compliance with regulatory standards but also enhance corporate reputation, attract investment, and drive long-term sustainability.. 

One of the key challenges for companies when preparing the ESG reporting, particularly in the environmental domain, is obtaining accurate, synchronized and validated data. 

Energy management plays a pivotal role here, as it not only enhances efficiency but also provides essential data and metrics to improve a company’s environmental performance.

For sustainability managers, strategically integrating energy management with ESG practices is crucial. This integration ensures compliance with ESG guidelines and promotes the sustainable and efficient use of resources.

Electrex, specializing in energy, environmental, and process parameters monitoring solutions, is at the forefront of helping businesses achieve these goals. 

What Is ESG Management?

ESG management refers to the systematic approach businesses take to handle their Environmental, Social, and Governance responsibilities.

  • Environmental: This includes initiatives to reduce carbon footprints, manage waste, and improve energy efficiency.
  • Social: This covers labor practices, community engagement, and diversity and inclusion efforts.
  • Governance: This involves the internal policies and controls a company uses to operate ethically and transparently.

Importance of ESG Management for Modern Businesses
ESG management is crucial for modern businesses as it enhances reputation, meets regulatory requirements, and attracts investors. Companies that excel in ESG practices often see improved financial performance and stakeholder trust.

Is ESG Reporting Mandatory for All Corporates?

Whether ESG reporting is mandatory depends on the jurisdiction and the specific regulatory framework in place. Here are some key points:

  • European Union (EU): The EU has implemented regulations such as the Non-Financial Reporting Directive (NFRD) and the Corporate Sustainability Reporting Directive (CSRD), which require large public-interest companies with more than 500 employees to disclose certain ESG information.
    On January 1, 2025, the obligation will be extended to all large companies.
  • United States: In the U.S., ESG reporting is not uniformly mandatory at the federal level, but there are increasing calls for enhanced disclosure. The Securities and Exchange Commission (SEC) has proposed new rules to require ESG disclosures, particularly around climate-related risks.
  • United Kingdom (UK): The UK has introduced mandatory climate-related financial disclosures aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations for certain companies, including listed companies and large private companies.
  • Other Countries: Many other countries have their own regulations and guidelines, often based on international frameworks such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), or the TCFD.
  • Voluntary Disclosure: Even in jurisdictions where ESG reporting is not mandatory, many companies choose to disclose ESG information voluntarily due to investor demand, stakeholder expectations, and the desire to demonstrate corporate responsibility and transparency.

In summary,  ESG reporting is becoming increasingly common and often expected by investors and stakeholders.

ELECTREX-MQQT-WEB-API

The Link Between ESG Management and Energy Management

Energy management is the proactive, organized, and systematic coordination of energy usage to maximize efficiency and sustainability. It involves monitoring, controlling, and conserving energy within an organization.

By implementing targeted energy management, companies can lower operating costs, boost competitiveness, and contribute to climate protection simultaneously. This is especially important for energy-intensive businesses.

Energy management is a critical component of the Environmental aspect of ESG. Efficient energy use reduces greenhouse gas emissions and resource consumption, aligning with environmental sustainability goals.

Integrating energy management with ESG strategies creates a comprehensive approach to sustainability. 

For example: a company uses an intelligent energy management system to monitor and optimize energy use in its facilities. Sensors and software record and analyze energy data in real-time. This data helps create environmental reports and identify ways to cut energy use, such as automating HVAC or lighting systems based on environmental and occupancy sensors. 

Collecting environmental data is more challenging than social and governance data, as it involves more complex measurements. However, integrating energy management systems makes it easier by using existing data, allowing companies to track CO2 emissions and gather data from suppliers to control their environmental impact.

This transparency enables precise tracking of energy use and creates benchmarking opportunities. 

Regularly reviewing data helps ensure sustainability targets are met, enhancing overall sustainability performance.

Without a structured energy management system, collecting and processing data is more challenging and requires pulling information from various sources, if available.

Challenges and how Electrex systems can help you 

Combining data from different sources

Managing energy and meeting Environmental, Social, and Governance (ESG) standards can be challenging due to the complexity of handling large amounts of data. Energy Management Systems (EMS) help manage this data from various sources like sensors and meters, ensuring it is accurate and reliable.

To make sure the data used in ESG reports is of high quality, companies need to check and correct it carefully. Combining data from different sources is also important to get a full picture of energy use and emissions.

Systems like our Internet of  Energy Platform can handle data from many sources, ensuring all relevant information is included.

EMS must manage detailed data from individual devices while also providing an overall view of energy consumption. Tools like energy management software and energy cloud dashboards help visualize this data, making it easier to spot areas for improvement.

Integrating Technology

EMS need to work seamlessly with other building systems and IoT devices to track and analyze energy use. This integration helps optimize energy consumption, reduce waste, and improve efficiency.

Advanced data tools turn raw data into useful insights, supporting ESG goals.

Cloud platforms and IoT connectivity allow real-time monitoring and data sharing, ensuring everyone has up-to-date information. APIs help different systems communicate smoothly.Kilo NET WEB Electrex

To facilitate the interconnection and data sharing processes, Electrex provides various methods including the MQTT protocol and the WEB APIs.

Meeting Legal Requirements

Following environmental regulations is essential to avoid penalties and maintain a good reputation. EMS helps companies comply by monitoring and analyzing energy use, producing accurate reports that meet legal standards, and ensuring transparency in ESG reporting.

They are the ideal solution for energy audits, continuous monitoring (e.g. ISO 50001) and for energy efficiency projects (e.g. EU Energy Efficiency Directive  and White Certificates or Energy Efficiency Certificates, Directive 2018/844 / EU – the Energy Performance of Buildings Directive and LEED certification).

Customized Reports and Communication Electrex-Software-Cloud

Good communication and engagement with stakeholders are crucial for successful energy management and ESG reporting. Creating tailored reports for different groups, such as executives and external stakeholders, improves engagement. Involving stakeholders in energy-saving efforts encourages a culture of energy awareness.

The Electrex Energy Brain energy management software and Energy Brain Cloud platform allow for each user to customize its dashboard and select the most relevant data.

Ensuring IT Security

Protecting against cyber-attacks and data breaches is vital for any organization using technology for energy management. Strong IT security measures are essential to safeguard sensitive information and maintain smooth business operations.

Indeed, the Electrex solutions are always behind the IT security infrastructure and will not share data with external third party servers. The software suite as well, can be installed “on-premise” in order to avoid data exposure on the Internet.

The software suite Energy Brain can act as a gateway for collecting, validating and aggregating data from the IoT devices in the field and after share this data via WEB APIs and MQTT with third party software. This way the traffic from third party software toward the IoT devices in the field is avoided and the data source is unique.

Contact me to schedule a call! I will be glad to answer any questions you may have.

Skender Musaj
Skender MusajExport Manager

    About us

    Since 1993 Electrex designs, develops, manufactures and markets, Made in Italy, instruments and software for energy  management and control.

    The Electrex solutions are used in the Energy Efficiency and Energy Automation applications, for the industrial, commercial, public, civil, and renewable energy sectors allowing a rapid return on investment.

    The solutions provided up to now allow the management of over 505,000 measuring points and more than 910,000 points are controlled via Energy Automation applications.

    Electrex, one of the first companies to operate in these sectors, has acquired over the years a considerable experience and competence that few other companies can claim to have. With over 40% of the staff dedicated to R & D, we demonstrate our strong commitment to innovation and continuous improvement in order to anticipate the needs of our customers.