Year-Round ESG Insights, With Xledger 

Ben Stone, Product Manager at Xledger UK, walked our customers through reporting on Environmental, Social, and Governance (ESG) in Xledger. Providing insights into Xledger’s functionality, Ben discussed the difficulties of Excel-based reporting and Xledger’s roadmap for future carbon accounting. 

For many organisations, ESG reporting still happens once a year, often offline, feeling disconnected from day-to-day decision-making. Unpacking the current approach to ESG, Ben highlighted that “a lot of people are doing large data exports in Excel. It’s a once-a-year reporting exercise where finance teams are just ticking a box rather than actually getting the information and understanding on a regular basis how their ESG reporting is going.” 

The difficulty is that this type of tick-box reporting is technically compliant with disclosure requirements, but it offers little insight into the narrative of how an organisation is really performing day-to-day. And narrative reporting is expected to become more important to regulators in the years ahead. 

So, why does ESG reporting often end up in spreadsheets?

Spreadsheets remain the default tool for ESG reporting because they are accessible and, for the most part, flexible. Finance teams can tweak emissions factors, adjust formulas, and update assumptions without waiting for system changes. But this flexibility also brings risks.  

When ESG reporting relies on spreadsheets: 

• Knowledge often sits with selected individuals, creating dependency on the key individual.
• Calculation logic embedded into formulas that aren’t easy to audit or to hand over. 
• Updates are time-consuming, so reporting tends to happen annually, rather than continuously. 
• The ESG always sits outside of an organisation’s core finance systems, leading to siloed and out-of-date insights. 

This approach also limits the amount of context finance teams can add to the data, preventing finance from creating a whole ESG narrative that auditors are beginning to demand.  

Financial data is the foundational ESG insight

One of the most practical shifts organisations can make is to think of ESG and finance as simultaneous objectives. Ben noted that cost-based reporting is easier to manipulate in spreadsheets – but it rarely provides tangible, live information.  

“A lot of people are doing cost-based ESG calculations. When they invest in a core finance system, the benefit is that their data is already in the system. There’s no more waiting for an export to an Excel document. Finance and the wider business get a real idea of how their climate reporting is going without having to wait till the end of the year.” 

In practice, this means that finance gains access to ESG reporting that: 

1. Refreshes frequently without additional manual effort 
2. Reflects current activity rather than historical trends 
3. Supports early intervention when trends start to shift 

By working directly from live financial data, ESG calculations update alongside day-to-day transactions, allowing finance teams to move away from ESG snapshots produced at a manic year-end towards continuous monitoring. 

The need for context in ESG reporting

Aligning ESG and finance data into a single system ensures that both departments work from the same source of truth. Instead of relying on siloed spreadsheets, ESG data can be analysed using the same dimensions used by finance.  

Consequently, finance teams can answer more meaningful questions, such as “Which projects contribute most to emissions growth?” and “How do different departments compare against the organisation’s climate target?” 

With a single source of truth available, ESG reporting becomes less about producing a single figure and more about understanding emission trends. With this context, finance and ESG teams can build a clear narrative for their ESG reports, ensuring that improvements and obstacles are acknowledged in equal measure. 

Starting with cost-based ESG reporting

Quantity-based ESG reporting is widely recognised as more accurate than cost-based reporting, particularly for climate disclosures. However, it is extremely difficult to capture quantity-based data (kilowatt hours or fuel usage) reliably, often leading to bad or inaccurate information.  

During the discussion, Ben emphasised that, for Xlegder, cost-based reporting is just the starting point. “Today, we’re very cost-based in our calculations. It’s an exciting starting point, and one that makes sense, because we’re a finance system and a lot of our information is around cost.” 

For many organisations, this method allows finance teams to begin reporting on ESG without waiting for perfect data to be captured from day one. Cost-based decreases manual workload and spreadsheet risk, while empowering organisations with a real-time view of their emissions.

How can you make ESG calculations auditable?

While providing a short in-system preview of how Xledger handles cost-based ESG reporting, Ben outlined a few ways that finance teams can ensure their calculations are auditable.  

As ESG reporting faces scrutiny, it’s important to prioritise transparency as well as accuracy. At a high level, ESG calculations are driven by: 

1. Emissions elements – the categories being reported on 
2. Filters – which financial data is included 
3. Factors – the rates used to calculate CO2 equivalents 

“It’s helpful to know how the data travels from financial into climate reporting,” Ben noted, “as this understanding helps teams maintain accuracy, transparency and, ultimately, high compliance and audit standards.” 

Beginning the ESG journey

To wrap up the session, Ben doubled down on the impact of continuous reporting growth. “At Xlegder, we understand that ESG capabilities are not a finished product. We’re continuously working on it to ensure it meets EU and UK standards, and the more feedback we get from our customers, the more we can drive development based on what our customers need.” 

As regulations evolve, finance teams will face the challenge of building an ESG reporting process that can adapt to compliance changes. Get in touch with our experts to learn more about Xledger’s leading ESG functionality.