“Data paints a picture of what could happen if we do nothing,” says author and CEO Cole Nussbaumer Knaffic. This has never been more appropriate than in the area of sustainability. Here, ‘doing nothing’ means global temperatures continue to rise with potentially catastrophic results. Gathering and understanding the right types of data will helps us visualize and understand the impact of our actions on our planet.
Most countries have a path to reach net zero carbon emissions. Businesses play a pivotal role in achieving this, although it’s clear that more needs to be done: EY1 found that while more than 80% of FTSE 100 businesses have publicly stated their commitment to net zero, only 5% have published detailed transition plans to get to net zero that would be classed as ‘credible’ under government guidance.
Transition plans are built on data which can be complex: businesses need to access, measure and report metrics which map their progress against targets, in minimizing their environmental and social impact. Gathering, storing and sharing accurate data is time-consuming, especially as there are so many different metrics which businesses can use to measure their environmental impact and form the basis of targets, but a lack of consistency around these reporting metrics could hamper the global drive to zero carbon emissions.
Caroline Griffin Pain is General Counsel and Company Secretary at Colt Technology Services.
Map sustainability metrics against recognized targets
It’s essential that businesses identify and prioritise sustainability performance data against the Environmental, Social and Governance (ESG) material issues which matter – to the environment, the community, the company, employees, customers and all stakeholders. They should measure the impact of their sustainability performance against financial and operational targets, too. For example, through greater energy efficiency and better waste management, businesses are more likely to see reduced operational costs.
The UN calls on businesses to commit and contribute to its 17 Sustainable Development Goals or SDGs, which focus on tackling a range of issues by 2030, but research from PWC2 found that although 72% of businesses reports they studied mention the SDGs, only 14% have specific targets for their contributions. Knowing what data to measure and against which targets to map is clearly still an issue for many organizations.
McKinsey suggest identifying and measuring these key metrics, as a starting point:
- CO2 emissions reduction
- Energy consumption
- Water usage
- Waste and plastic reduction
- Noise pollution
- Number of suppliers audited against environmental standards
Some businesses classify and categorize their greenhouse gas emissions data and set targets using scopes: Scope 1 refers to direct emissions, from fuel combustion or company vehicles, for example; Scope 2 applies to indirect electricity emissions, or the purchase and use of electricity for heat or cooling; and Scope 3, to value chain or supply chain emissions (which often make up the largest proportion of an organization's carbon footprint).
Aligning them with widely-recognized standards offers consistency, and the ability to track and report progress, such as the GHG Protocol, Global Reporting Initiative Standards and the British Standards Institution. Setting Science Based Targets helps businesses prioritize and commit, and is currently viewed as the “gold standard” for setting decarbonization targets.
Supercharging data with 3rd party platforms
Businesses should look beyond the information they’re gathering on their own organization, if they’re to really make a difference measuring and managing their impact on the environment. This data becomes supercharged when it’s interconnected and integrated with third parties’ environmental data. Innovative cloud-based platforms make this easier, and organizations begin to see a clear picture of their carbon footprint to drive material improvements across the ecosystem.
Accenture3 in its ‘Measuring Sustainability, Creating Value’ report says, “Access to the right data to make better decisions at every level is critical. Where lack of skills is an issue, gaps can be closed by reskilling, as well as the smart deployment of existing and emerging technologies. Cloud and platform providers play a pivotal role here, in tracking and providing interoperability throughout the value chain.”
Forward-thinking companies are already applying these best practice recommendations in practical ways. Take travel, for example. Some companies are working closely with their travel partners to integrate their travel platform with third party data centered on travel-related carbon emissions. This then presents travel-related carbon emissions to present key facts and alternative travel options, helping employees make smarter choices about sustainable travel and drive real, behavioral, change.
Booking platforms can be adjusted to incorporate a traffic light system on carbon emissions for each trip; a move designed to make employees consider the more sustainable choice, like taking a train rather than a flight. After booking a train ticket via the platform, a message can pop up that shows graphics and illustrations with relatable messages such as, “By taking this type of journey, you’ve saved enough power to charge x number of mobile phones or plant x number of trees”. As we can see, when shared across intelligent platforms, third party data suddenly becomes an actionable, powerful, force for good.
Platforms that operate like this can make a huge difference. Businesses can invite their trading partners to share information on their own sustainability practices, to provide transparency and accountability between partners. Those businesses can then be assigned a rating which benchmarks a company’s performance which is highly valued by investors, partners and customers.
Furthermore, businesses which focus on ESG have been found to outperform others. A report from Accenture5 found that between 2013 and 2020, companies with consistently high ESG performance tended to score 2.6x higher on total shareholder return than medium ESG performers. It may be the case that businesses which are transparent and committed to ESG reporting demonstrate a deeper commitment to their overall culture and values than others. Either way, ESG must be a business imperative. Accessing and interpreting sustainability datapoints is fundamental to the drive to Net Zero. Here, data gives us hope: it’s truly meaningful and valued when we use it to make predictions and drive positive change.
