Benchmark ESG is a Business Reporter client
By Peter Walsh, Business Development Director, Europe, Benchmark ESG
Companies today are talking a great deal about decarbonisation and, for many, it has increasingly become a top priority. One recent study by NTT DATA and PAC found that 87 per cent of European business leaders expect to achieve zero emissions by 2030 at the latest, indicating that significant planning is being done and resources brought on board to ensure the goal is realised.
This is being driven by a range of regulatory frameworks, including the European Commission’s Green Taxonomy, which will regulate green finance evaluations. But beyond compliance obligations, companies know that sustainability is central to business success - indeed, some are calling a clear ESG strategy "the new baseline" for hiring talent. With increasing transparency and reliability of sustainability performance data, applicants, potential investors, and other stakeholders can more easily evaluate a business’s success or failure in meeting sustainability goals. Poor performance, therefore, has significant and wide-ranging implications for the viability of a business, while measurable progress will be rewarded by an ongoing license to operate.
Yet conversations around how exactly decarbonisation will be done tend to be around technologies being developed to help businesses transition to carbon-neutral operations. The NTT DATA and PAC study found that executives believe IT will play a vital role, so it follows that the bulk of investment will likely go on improving IT function.
But that won’t be the only ingredient for success. What happens if not everyone is on board with the work required to realise a successful transition or if a company’s messaging around decarbonisation isn’t properly delivered? Technology might provide a key mechanism for going green, but other aspects of a business also need to be in place.
"Culture" is an umbrella term that captures so many of the elements that are often left out of the tech-dominated conversation around decarbonisation. Culture is the unsung hero of any transformative change within a business. Tweaks can be made here and there, and new technologies may achieve short-term gains on their own. But if you want durable change, the whole foundation needs to shift. To ensure ESG objectives are met, business leaders must build a sustainability culture. They must find a way to ensure that everyone, from the boardroom to the shop floor, is invested in the idea of lasting transformation.
There are various ways to do this. Criteria for success can be set, and incentives such as executive bonuses can be offered to encourage employees to work hard towards their goals. Data can – and should – be leveraged to its full potential. Data is invaluable, as it serves as a lynchpin of any sustainability programme – with it, we can see in fine detail what progress a company is making towards meeting its goals.
To utilise this data properly, it’s crucial that it is investment-grade. That means it must demonstrate accuracy, timeliness, completeness, relevance and auditability. No longer can businesses boast of the mere existence of ESG data; they must be able to prove that it is trustworthy, and how they use that data must be made transparent.
Yet many have found that this is easier said than done. Inefficient and inconsistent data flows brought about by the continued use of manual reporting and analysis tools continue to impair the performance of businesses. This is something they must improve upon if they are to make realistic strides towards meeting ESG disclosure requirements.
If businesses can overcome this barrier, they’ll achieve far-reaching results. Investment-grade ESG data has benefits beyond just external communications; it feeds directly into the creation of a durable sustainability culture within a business. If data integrity is assured, the ESG-related performance of the company can be precisely measured – and so too can the performance of individual employees around key sustainability objectives. Business executives can develop incentive structures accordingly that align with the performance data being collected. As the old boardroom saying goes, "that which gets incentivised gets prioritised." By marrying strong data to a vision for company culture, the pace of individual and company-wide momentum around sustainability will quicken.
We may know how vital data is to the transformation of company culture and how important a shift in culture is to lasting change around sustainability. But how do we steer both elements in the right direction?
Unifying the enterprise through digital transformation is key to achieving both aims. Benchmark Digital Partners, a provider of cloud-based digital solutions for sustainability and ESG reporting, product stewardship programmes, and risk and compliance needs, helps companies around the world ensure data integrity and enhance the data collection and reporting processes. The Benchmark ESG platform enables businesses to not only verify the quality of their data but also to drive collaboration and engagement across functional teams to identify gaps and opportunities in real-time and sustain ESG performance improvements long term. These services are delivered through a range of customisable best-practice workflows that allow effective cross-functional collaboration and defined, predictable outcomes.
ESG disclosure demands on European companies are growing by the year, thanks to climate change, sustainability drivers and increasing regulatory pressure. Building a robust and lasting culture may take extra work and resources, but there are solutions, such as those offered by Benchmark, that ensure the process is streamlined and transparent and drives meaningful results. Such is the clamour for progressive change among businesses that the work required to cultivate a sustainability culture is fully worth it – in terms of adding value, managing risk and, ultimately, securing the future of any company.
Access Benchmark’s ESG Resource Library for emerging trends, expert takes, corporate case studies, and best practices for sustainability and ESG data management and reporting.
Originally published on Business Reporter
