ESG is a daunting topic. It’s moved beyond compliance and regulatory reporting to something that prospective employees and clients view as a critical factor in deciding whether to join or do business with you. There are many facets to ESG – the environmental (with energy used to heat, cool and light buildings accounting for 28% of all global carbon emissions) to social and governance (improving diversity and inclusion, gender balance, employee wellbeing and transparency of procedures and decision making), data and technology has a critical role to play regardless of where an organisation is in its ESG journey.
Technology and Data will play an important role in supporting the future ESG agenda from the identification, capture, integration, storage and analysis of data to drive actionable insight with clear, tangible and measurable goals. It can be difficult to know where to start though. Our view at embracent is:
ESG is not an optional topic
We’ve moved beyond the “why” – it’s now about the “how” to pursue sustainability in a practical way. It’s more than just increased regulation (which like death and taxes is one thing you can rely on), it’s also increasing demands from customers, employees and stakeholders – investors and regulators. All of this is driving the need for more sophisticated ESG analysis to meet the price to play in today’s markets.
It’s not Big Bang
You can start small. Set clear measurable ESG goals and timelines. Identify what’s needed to achieve the goal, develop a plan and measure and monitor your progress over time. It needn’t mean significant technology investment – most initial steps involve manual activity with limited datasets, but an outcome focused view will help drive the investment case for increased datasets, automation and improved decision-based analytics.
IT has an ever-important role to play
Technologies include data management platforms to store and process ESG data, analytical platforms to streamline ESG review and ongoing monitoring to improve organisational reputation, reduce risk, and increase stakeholder trust.
The use of IoT devices supporting the ESG agenda are on the increase; products such as Utopi who use smart IoT devices to collect live data to control energy usage and move towards estate decarbonisation, while other solutions such as Measurabl automatically collect data from disparate sources to allow management from a single platform or Fitwel who provide an overall building rating based on certain features such as outdoor space, workspaces, shared spaces, water supply and food services, among others. All have varying roles to play in the support of your ESG agenda.
Technology’s role also doesn’t end with new data sets or better reporting., Technology can be used to time ESG adjustments and proactively monitor them by using real-time monitoring, automated alerts, machine learning algorithms, predictive analytics, energy management systems, and environmental monitoring systems. By using technology to proactively monitor ESG metrics, potential issues can be identified before they become major problems, and action taken to improve environmental and social performance.
Don’t underestimate the Change Impact of embedding ESG throughout the Organisation
Embedding ESG strategically in an organisation is difficult but necessary to demonstrate commitment to sustainable responsible practices and corporate responsibility. Digital and data will play a critical and ever important role in making this happen. There must be strong top-down, visible change leadership to embed an ESG mindset across the organisation whether that’s realising operational efficiencies or driving social responsibility initiatives. Change also needs to be driven from the bottom-up. Employees must feel responsible for owning and realising the ESG agenda.
As well as a strong communications plan, the establishment of ESG champions to engage across the teams to understand what’s important to them in this space and drive adoption. Champions can also help evaluate and embed change directly into existing workflows, using frameworks such as Lean Six Sigma to better manage their environmental footprint, realise efficiency benefits and reduce costs.
Gamification can be a powerful tool in bringing ESG to life. Whether it’s a competition, a quest, or a simulation, it should include rewards and incentives to motivate employees to participate and engage. Presenting progress updates on key activities will also demonstrate progress being made, Information on department, building, team performance can help to create a sense of community and encourage collaboration among employees.
ESG is only going to increase in importance within the corporate agenda. Technology has a critical role to play but it can be a time-managed, cost-controlled, journey. Identify the goal, prove the value and build upon it. Support investment in data platforms, IoT devices and analysis and monitoring capability to improve environmental and social performance and enable tangible actionable insight e.g., reduced energy consumption. Technology isn’t the silver bullet but it’s a key enabler to realise the wider ESG agenda.