Profit Magazine - May 2011

Increased Data Quality Leads to Increased Trust

Since implementing Oracle Hype- rion Financial Management for nonfinancial data reporting, Niels Strange Peulicke-Andersen’s Quality, Health, Safety, and Environment group at DONG Energy has proved the value of its new sustainability reporting to the finance side of the business. As a result, says Peulicke-Andersen, who serves as project manager for the group, the two sides have much more trust and mutual respect for each other—an additional benefit that he didn’t anticipate.

In fact, today the financial and nonfi-
nancial data reside on the same server
in the same application—a level of trust
previously unimaginable.

“You need to be able to show the numbers in many different
ways depending on the target group and the content that it’s
being used for,” says Peulicke-Andersen. “That’s why it’s very
good to have the data in a database where you can extract data
in multiple ways. You can relate emission to production. You
can relate it to an index number. You can say, ‘Now I just want
to look at the Danish part of the production.’”
Subsequent audits have proved the value of the new system.
Mogensen says there are two ways to perform an audit: the
auditors either test data themselves or they test the controls the
company uses to collect data. In CSR reporting, she says, there
is growing consensus that auditors should be testing controls,
not the data itself.

Mogensen says DONG Energy is at the leading edge in this regard. “I expect that in three to four years, our assurance will be based only on DONG Energy’s own controls being effective for ensuring correct data for the CSR reporting.”

FROM SUSTAINABILITY TO PROFITABILITY

Although the majority of DONG Energy is owned by the Danish state, it operates as a company and must remain profitable to stay in business. That means no matter how beneficial its CSR initiatives are for society, the environment, and end customers, they also must contribute to the bottom line.

“I think the next step, when you have raised the quality
of the nonfinancial data, will be that people will expect
companies like us to link the data closely together and help
interpret for stakeholders what it means in terms of finan-
cial performance when the nonfinancial data is going up or
down, or vice versa,” Peulicke-Andersen says. DONG Energy
has put itself in a unique position in that regard, making the
core of its business strategy to help solve society’s need for
reliable and clean energy—and to do so on a sound commer-
cial basis. While DONG Energy aims to halve CO2 emissions
per kilowatt-hour between 2006 and 2020, management also
wants to double earnings in the meantime.