How to use ESG to create lasting value in a new age
Increasingly, organisations across industries and sectors are transforming dormant and underutilised data, improving data collection techniques, and analysing data points to drive positive change. Discovering relevant sustainability insights for practical and effective solutions can improve inefficiencies, cut costs, and improve your impact on the planet. Since data-driven sustainability insights can help create value for your business, let’s talk about some of the best ways to promote it.
Data is much like a fingerprint; every organisation has them but the patterns that emerge will always be unique to your company. Data analysis can help you identify patterns in consumer behaviour, manage resources efficiently and proactively manage risks. A golden example of this is the pharmaceutical giant, GSK. To reduce waste and GHG emissions, GSK aggregated their supply chain data and measured that their inhalers represented approx. 40% of their overall supply chain. After introducing the worlds first inhaler recycling scheme, GSK cut emissions equivalent of scrapping 8,500 cars over the course of the programme.
Data analysis can lead to sustainability insights that help find practical pathways to environmental stewardship. However, analytically rigorous data is needed to enable accurate and reliable insights. Automating the data analysis process by finding the right ESG software solution allows you to spend longer capturing sustainability insights and focus on value adding.
Getting target setting right, the first time
Look-in-mirror moments are imperative for continual improvement. Self-interrogative processes can provide useful insights into where your business is now vs where your sustainability journey can take you. On the other hand, for a business to achieve meaningful environmental change, future-proofing your strategies is critical.
When setting specific targets for reducing your emissions, referencing the latest climate science is important to ensure you’re doing it right. For one, it can do wonders against being subject to the ‘greenwashing’ label by stakeholder; a term that has had a record-breaking search year according to Google Trends. Moreover, the uncertainty of future climate change disclosure regulations would suggest that laggards can be expected to fall behind.
Accessing the Science Based Targets Initiative (SBTi) guidance for identify sector-specific targets in alignment with the 1.5°C Paris Agreement targets can help get targets right, the first time.
Finance green growth
The finance sector’s efforts to adopt sustainable finance practises is accelerating. Recent years have seen a significant jump in green fundsfrom the government and from shareholders, to facilitate clean and resilient economic growth. The collective financial impact from the growing green consumers, expected new ESG regulations and brand equity from Equality, Diversity, and Inclusion (EDI) practises are increasingly important to private and public investors. A recent survey by PwC revealed that up to 72% of PE firms use ESG criteria to screen target companies. If you’re a start-up businesses or SME, showcasing your commitment to sustainability to ESG disclosures could put you in good stead with green investors.
Assessing Social Impact
The ‘S’ in ESG is often overshadowed by a focus on improving environmental performance. However, people are at the heart of all business and they encourage and enable value adding activities. In short, your stakeholders possess a lot of power and can either diminish or foster co-value creation. Whilst COVID-19 has increased prioritisation of social issues, the benefit and importance of improving impact in this domain of sustainability is often overlooked.
Driving positive social impact requires an assessment of the whole system to manage, govern and report on social risk factors from the supply chain and operations. The right ESG and Environmental, Health and Safety (EHS) software solutions can provide a holistic approach to assess and manage your social indicators. Specific social indicators will vary from industry to industry, but wider themes include ‘socio-economic inequality’, ‘diversity, equality and inclusion’ and ‘health and safety’ criteria.