Environmental, Social, and Governance (ESG) principles are fast becoming required criteria in a company’s corporate story.
Yesterday’s lip service to corporate responsibility efforts and token statements about environmental and financial sustainability are no substitute for today’s call for an analysis of real ESG metrics and reports. Investors increasingly expect companies to explain the drivers of their success, including the key performance indicators of success, mitigation of any perceived risks and some measurement of the sustainability of the factors that drive success. Inasmuch as purpose and culture are drivers of sustainability, ESG measures the value of a company seen through the lens of its values.
Investment firms like Black Rock, State Street, and Vanguard have taken a leadership role in articulating the relationship between ESG and corporate success; for that reason they have led the call for more robust ESG disclosures. Business Roundtable has broadened the purpose of a corporation to include “embracing sustainable practices.” It’s clear that every business needs to create a strong ESG story.
And the only way to tell a good ESG story is with great ESG data.
How can better technology create better ESG disclosures?
1. Data Shouldn’t Hide
Data wants to be free, and with smarter technology, it can be looked at in real time, all the time. For the evolving awareness of ESG data, this is a watershed moment.
A data-centric, data-focused, and data-transparent company has a very real advantage over its competitors, especially in these early, “wild west” days of ESG reporting.
And better data starts with with better communication between the top of house.
The top of house must rally around key questions like:
What is the current process around creating your ESG disclosure?
How does your website give out that information and how do you present it?
What do your investors want to know in the financial disclosure about ESG?
Smarter technology empowers the top of house to have these conversations in a safe, secure forum where everyone who needs to share information can do so without fear of internal miscommunications or hackers from the outside.
Access to the right information means better communication and more collaboration on the ESG story — something that can’t happen without smarter technology.
2. There is Power in the Process
Smarter process is the next secret to telling a powerful ESG disclosure story.
Because good ESG metrics require coordination between a complex network of overlapping internal departments and, ultimately, input from the board, the C-suite, and executives at every level, teams need strong workflows to move the right information through the right channels. This cannot happen efficiently without technology, and ideally automated workflows — there are simply too many people and too many moving parts involved to keep up by hand.
Streamlined processes that lean into automation, workflow technology, and collaboration are the pillars of powerful coordination, transparency, and creativity that a strong ESG story demands.
3. You Can’t Argue With Proof
ESG metrics may be in their infancy, but documentation is a timeless way to prove a point. Whether using the SASB Materiality Map or some other metric matrix, good data doesn’t lie.
Your ESG story will do well to weave documentation and proof into the foundation of how you tell your company story. GreenBiz tells us that to build the foundation for a strong ESG story that aligns with your brand, begin by refreshing your sustainability report, committing to ongoing communication, and engaging external influencers.
We couldn’t agree more.
Smarter technology is what gives you the ability to document compliance along the way.
Top of house voices need to coordinate from the beginning so that all of this data is aligned with investor, boardroom, and executive goals. The ESG story must be a united story.
In Conclusion
When it comes to telling a strong ESG story, making sure the data doesn’t hide, streamlining communication and information gathering processes, and prioritizing digital documentation all mean your ESG story will be a strong one. And the importance of telling that ESG story is only growing.