The Corporate Response to the Climate Emergency
Ever since the Paris Agreement in 2015 focused corporate minds on the impending climate emergency, market leaders have set ambitious targets to reduce greenhouse gas (GHS) emissions and attain carbon neutrality as part of a greater global effort to reach net zero.
Corporations face mounting pressure to demonstrate measurable progress on achieving net zero. However, to accomplish this decision makers need accurate, auditable data on their environmental and social governance (ESG) and sustainability performance.
Enterprise-wide software solutions are the game changer. Digital solutions manage data complexities with ease, giving full visibility over entire operations and arm businesses with the very best intelligence to inform their strategy on achieving net zero.
While digitization of ESG and sustainability performance data seems straightforward, many businesses have put off investing in digital transformation for a number of reasons. Commonly, there is a perception that other business needs are more important. So, why prioritise digital take-up?
It’s also not uncommon for risk-averse businesses to view the implementation of a digital solution to manage these programs as a superfluous pivot away from their core business strategy. Instead, many believe that spreadsheets provide a sufficient level of transparency for reporting and fail to recognise the wider, and more long-term benefits that embracing digital solutions can bring about.
Finally, humans are naturally resistant to change. On a practical level, employees feel more comfortable working with a system they are familiar with and hesitant to adopt new tools – even those that can significantly enhance performance and productivity.
With those common objections to digitizing the management of ESG & sustainability performance data in mind, here are five reasons why businesses should make that investment now.
1. Investors Favour Companies with Strong ESG Performance
Financial backing is critical to business growth and driving sustainability; so, it’s worth noting that institutional investors increasingly cite ESG performance as the single most important factor in shaping their decisions. A PwC survey found that 77% said they would stop investing in non-ESG products this year.
So, if investor confidence translates into funding that gives corporations a competitive edge, digital solutions provide the tools to deliver what investors are looking for. But that’s only the tip of the iceberg.
2. Digitizing ESG & Sustainability Data Creates Massive Internal and External Value
An investment in digital solutions guarantees strong financial returns. An enterprise-wide software solution manages reams of data effortlessly, eliminating disparate IT systems, removing operational inefficiencies, and enhancing data processing. That means reduced costs, increased savings, and a healthier bottom line.
Software reduces individual workloads and frees up valuable time across the workforce, allowing staff to focus on other high-value tasks. Access to more accurate intelligence also allows management to identify high-performers and share best practice, driving up standards across the board.
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Digital solutions also enhance your environmental credentials. Having a stronger grasp on your data means you’re more agile and can respond better to current and new regulatory demands. This provides investors with the assurance that you are taking ESG performance seriously and shows regulators you are a trailblazer.
Lastly, internal and external stakeholders will have a much more positive perception of your ESG and sustainability performance, which in turn boosts customer sales, stakeholder engagement, and staff retention. In short, it does wonders for your brand and culture.
3. Digitized Data is More Accurate and Enabled More Decisive Actions
Digital solutions can aggregate data seamlessly across multiple sites in real-time and perform complex calculations. This provides a more accurate picture and timely analysis of progress on achieving net-zero. Armed with these insights, businesses can make informed decisions that transform their net-zero performance.
The large Omni channel retailer aims to achieve zero emissions across its global operations by 2040 by focusing on four strategic decarbonization pillars – renewable energy, refrigerants, stationary fuel and transportation. With retail and/or ecommerce operations in 24 countries, in addition to sourcing products from over 100 countries, there is no doubt that Walmart has moved on from managing its ESG and sustainability data in spreadsheets in order to create and distribute its annual reports. To that end, the business publicly reports its progress towards its targets in its annual CDP climate change disclosure and annual ESG report and its digital transformation has enabled it to better determine the priorities for action under these strategic pillars..
4. Digitized Data is Auditable and Improves Compliance
When data is captured in disparate systems and formats it is impossible to create a reliable audit trail because manual data entry is prone to human error.
Whether it is sustainability reports for GRI compliance or carbon footprints for their GHG compliance, digital solutions can track data change and record histories, ensuring greater transparency. Businesses can also give auditors data access in order to review targets and verify data.
5. Digitization Positions Your Business as a Market Leader Ready for Future Challenges
Digital solutions make it easier for you to comply with new and future climate laws and regulations, positioning you as a market leader that is well placed to take up new opportunities to develop revenue streams and
As the International Energy Agency acknowledges, both innovative technologies and access to new types of data have been instrumental in creating
But the benefits have been felt beyond the energy sector. Take DuPont, a diversified science company. According to management consulting firm McKinsey & Company, the business has recorded $2bn in annual revenue from products that reduce GHG emissions and an additional $11.8bn in revenues from nondepletable resources.
Final thoughts
For many businesses, taking the first step towards digital transformation can be a daunting prospect but adopting enterprise-wide software solutions offers huge rewards.
Better able to track metrics and more accurately analyse data, software solutions greatly enhance business effectiveness and efficiency. By empowering employees and improving their engagement, businesses are better placed to respond to internal and external pressures and more adaptable to future challenges. Crucially, this makes them more resilient in the long run.
To learn more about how digital solutions can help you exploit your data so you can take your net-zero aspirations to the next level, check out the eBook Leading the Way to Net-Zero with Digitization.
