Increasingly, businesses are coming under pressure from all stakeholders to demonstrate tangible progress towards ESG objectives. A company’s ability to preserve their social license, will likely depend on their ability to recognize and handle their externalities. But with ESG covering anything from energy consumption, to employee volunteering hours, to diversity statistics, managing ESG reporting and goals can be challenging and time-consuming if organizations lack the right processes. 80% of business leaders remain frustrated with the lack of progress in meeting sustainability initiatives, despite 96% of business leaders wanting to rise to the occasion and make more headway in this area.
The question for many, then, is where to start with ESG initiatives. ESG is more than just setting targets and enhancing brand image – it’s about how business leaders can come together, engage their staff, and effectively use data to create actionable goals and make real change.
The need for effective leadership and employee engagement
It can be easy to let ESG projects fall by the wayside – especially if teams are preoccupied with managing disruptions or planning for the upcoming year. Carving out time for ESG must be the first step for corporate executives. An effective way to do so is to create an ESG working group which sets aside time for frequent meetings to discuss goals and progress.
However, the only way that this top-down approach works is with bottom-up buy-in. The new wave of millennial and Gen Z workers want to work for organizations that align with their values and tackle ESG as a core business imperative. Including employees in authentic conversations, encouraging them to offer ideas on how to improve ESG strategies, and communicating the importance of ESG across internal and external communications are just some examples of how to effectively engage employees in your company’s commitment to change.
This engagement and transparency should feed all the way through to setting ESG goals. Specific, measurable, and attainable targets encourage employees and leaders to take ownership of actions. For instance, setting goals for “One Big Thing” each year with an initiative that matters deeply to your employees, or deciding to use a percentage of profits to support global causes selected by the ESG working group. This kind of engagement and accountability mobilizes large-scale change organization-wide.
Siobhan Wilson is Senior Vice President EMEA Applications Customer Officer and UK Country Leader at Oracle.
Data as a facilitator
Business leaders must look at how they can narrow the gap between intention and results, considering this engagement and transparency throughout the organization. Nearly 9 in 10 claim that executing on sustainability and ESG activities is challenging, and that fundamentally, this is down to a lack of data.
Due to the organization-wide nature of ESG data, spanning systems across finance, HR, supply chain, and customer experience applications, it becomes difficult to build a complete picture. When business leaders lack a single view of this data, it becomes impossible to accurately measure progress or find efficiencies to drive further improvements. Through integrating these disparate data sources into one enterprise resource planning (ERP) platform, ESG data can become a great, usable asset. Business leaders should look to invest in solutions that allow them to connect, manage and standardize data across all systems to enhance planning and execution and accurately report on progress.
AI elevates ESG to a new level
Time-consuming, manual reporting methods are one of the major challenges in meeting ESG goals, according to almost a third of business leaders. Leaders must embrace developing technology like artificial intelligence (AI) to maximize the value of ESG data. This not only facilitates cross-departmental collaboration and enables leaders to track progress effectively – but it also transforms data systems into powerful recommendation engines, to pinpoint precise paths to meet targets.
For instance, using AI to bring supply chain, sustainability, and financial data together on the same platform enables leaders to pinpoint ways to reduce carbon emissions, minimize costs and find the most efficient routes and transportation methods. Meanwhile, these connected systems can quickly report on GHG Protocol Scope 1, 2 and 3 carbon emissions, and highlight the measurable impact of increased logistics efficiency on ESG goals.
This effective use of AI allows business leaders to collect data without error, no longer relying on multiple people to fill in spreadsheets correctly. Automation also reduces time spent on manually extracting and analyzing data, enables better management of integrating complex data across global supply chains, and uncovers key ESG insights that can drive organizations towards hitting their goals.
Meeting ESG initiatives requires involvement from everyone - leaders and employees alike. Business leaders must work towards making ESG targets a business imperative, not just a nice-to-have. Through setting collaborative targets, developing a single source of data, and effectively employing AI, businesses can bring ESG in at a strategic level in the purpose, governance and corporate strategy of the company.