ESG

This week I’ve been wondering about the Environmental, Social and Governance (ESG) agenda and the role technology can play in helping organisations with this increasingly important topic.

Research has shown that employees, customers, shareholders and investors are asking more and more questions about purpose, why they should work for a particular company, purchase particular products, engage with subjects, invest in potential etc. There’s a need to understand if the right thing is being done, in the right way and how it can continue to drive improvements.

For whatever reason organisations start to look at ESG initiatives, it feels like it has the capacity to impact the entire business across strategy, decision making, action and reporting of progress and outcomes to show value beyond financial measures.

It’s this desire for more insight into the purpose driven agenda and impact on business operation that will fuel the need for a greater focus on data; collection, monitoring, evaluation and publication across the 3 pillars of ESG.

In my view ESG has to be integral to other transformation activity rather than an add on or after thought, if it’s not embedded it will, like many other things, be all the more difficult to integrate after the event.

Where ESG feels slightly different from other regulatory or board reporting is the longitudinal nature of some of the initiatives.

If we look at the Environmental aspects a move to Net Zero isn’t necessarily going to happen over night, it takes careful planning and measurement across organisations and their supply chains. If that monitoring involves collecting data from third parties or from building management systems how do you make that as simple as possible, what standards do you insist suppliers adhere to and so on.

On the Social theme how do you measure and report actual progress across a range of diversity and inclusion topics when there are long term systemic under representation issues – how do you show you’ve moved beyond policy and into active action across such a wide range of subjects and demonstrate the impact you're having on making a difference.

From a Governance perspective it may be slightly different, here it feels there’s a need to ensure Boards embody the other themes, agree the positioning and risk, organise and measure outcomes.

Whilst there seem to be a range of ESG specific reporting tools entering the market and it might be attractive to go straight to implementing something it feels more appropriate that organisations understand what they want to do, baseline their data and redesign their measurement framework to ensure they’re making a difference.

CIO’s have a huge role to play in ESG, not only in ensuring the technology function is addressing the 3 core pillars but in providing the expertise, tools, platforms and integration to ensure a sustainable business strategy is developed and implemented.

By far the most important aspect to me is to ensure ESG is embedded into transformation activity and has a focus on driving data quality, accuracy and accessibility through automation, collection of data at source and providing the right set of analytical and reporting tools.

I’d be interested to hear the views of other CIO’s and what they’re thinking about when it comes to ESG……