A Global Focus on Sustainability is Shifting Corporate Agendas
It has become increasingly clear that sustainable development is now one of the driving forces of our time. By taking a quick look at news headlines, we see this reoccurring theme amplified by modern social movements, such as Fridays for Future and the ongoing COVID-19 pandemic. The world‘s political, societal, and economic focus is directed towards sustainability, and its Triple Bottom Line philosophy calls for a balanced promotion of people, planet, and profit-focused objectives and initiatives. Taken together, this leaves corporations wondering: How do we manage to preserve planetary boundaries and thus a livable future within these natural limits?
Economic growth and stability for corporations are still tied to traditional levers, such as employee retention, revenue, and profitability. However, these factors are now affected by new drivers, including globalization, demographic shifts, climate change, resource scarcity, and consumerism.
Global movements addressing climate change and issues at the core of ESG and sustainability include:
- The 2030 Agenda (also known as the Sustainable Development Goals (SDGs)): A set of goals put forth by the United Nations serving as “the blueprint to achieve a better and more sustainable future for all people and the world“. The goals are intended to be achieved by the year 2030.
- The Paris Climate Agreement: An international treaty on climate change, which has decarbonization at the top of its agenda. The agreement forces the global community to undertake powerful actions to limit global warming at 1.5 degrees Celcius.
Nations are responding to these regulations by formulating their own national laws and plans of action. An example of a national response to the Paris Climate Agreement is Germany’s Climate Change Act, which aimed to reduce greenhouse gas emissions. However, the Federal Constitutional Court deemed the act insufficient and insisted lawmakers amend the act to include more aggressive timelines and concrete measures of success. The Climate Change Act was amended just a few months later, thus reiterating the urgency and importance of such regulations.
Other regulatory developments, such as Germany‘s Due Diligence Act (which focuses on the supply chain as a means to uphold corporate due diligence) and ESG developments on capital markets, such as the EU Taxonomy, are shaping corporate agendas and pushing sustainability to become one of the central management tasks.
For governments and businesses, these new regulations and agreements amount to complex systems to measure, baselines to compare, and the need for a regular and proven methodology to measure their progress against these goals. To meet these challenges, a new way of tracking the performance and progress of sustainability initiatives is required: integrated digitization.
Corporate Sustainability 2.0 and Future-Proofing
Many companies now recognize the importance of sustainability for their business success and understand it’s about future-proofing their business for growth and success in an increasingly changing time.
Some trends driving the focus on future-proofing include:
- Increasing pressure from investment firms, boards, and shareholders for businesses to not only report but take action on sustainability data
- Transparency demands on supply chains, business processes, and DE&I initiatives driven by consumers
- Regulations with financial consequences
- A competitive labor market forcing businesses to re-evaluate their attractiveness to a new generational perspective
Beyond Spreadsheets: The Next-Gen of Sustainability Reporting
It is clear that the increasing formalization of sustainability and ESG management within businesses – especially through reporting along recognized standards, such as GRI – has spurred a focus on a data-first approach over the qualitative narratives, which too easily cross the line into greenwashing. The amount and depth of data in the form of non-financial indicators and KPIs, with which sustainability can be managed, is increasing. As a result, spreadsheets are increasingly reaching their limits and data quality is simultaneously being impacted.
To combat this issue and establish next-gen reporting practices, the following program attributes are necessary for effectively managing sustainability:
- Digitization – Digital structures are needed to reliably capture and merge data and data streams.
- Collaboration – It takes collaborative structures to engage relevant stakeholders in sustainability planning and implementation.
- Building a digital workforce – There is an increasing demand for data experts who can analyze systemic interrelationships.
To meet these requirements and advance sustainability and ESG programs into the core of business operations – in essence, to give them a seat at the table – software solutions are key. The more complex and extensive sustainability becomes in the corporate context, the more important software solutions become. Experience shows that spreadsheets reach their limits with increasing complexity, they become error-prone due to incorrect cell references, and data input is not always reliably traceable.
In addition, data is often entered into different spreadsheets for various purposes. Thus numerous files and data sources often exist, which makes it difficult to ensure comparability of data. This often leads to additional time and efforts as different sources have to be maintained. With software, you can build appropriate structures that leverage these synergies and interactions in data entry and evaluation.
Sustainability Software in Practice
As a corporate sustainability manager, using professional software solutions, such as Cority’s Sustainability Cloud, provides a central platform in which all relevant information and data are documented. This can be completed comprehensively and with transparency by different stakeholders in a reliable manner, using prestructured data entries and automated workflows to ensure efficiency and effectiveness. Additional validation and plausibility checks increase data quality, for example in the case of a more complex corporate structure, where data needs to be aggregated to a corporate level.
Through integrated sustainability standards, such as GRI, CDP, TCFD, or the SDGs, required data can be mapped to avoid double effort. If a KPI is requested by two different standards at once, it only needs to be collected once to be integrated into the separate reports. Furthermore, intuitive dashboards support the evaluation and steering of sustainability topics, as well as the visualization for reporting. In the case of an audit, data entries and comments are documented in the software by means of creating a history that can be traced at any time.
In Short: Software is an Accelerator and Enabler of Corporate Sustainability
Software solutions, such as Cority’s Sustainability Cloud, can adapt to the demands of new-era corporate sustainability, without compromising data quality. Automated workflows, interfaces to other systems, as well as the implementation and linking of complex structures, are not only cost and time-efficient but also accelerate sustainability performance within the company. Simultaneously, stakeholders are empowered with information through collaborative work within the software to ensure sustainability standards are being met.
The new era of sustainability requires not only improved management practices but also appropriate and reliable digital solutions that can successfully accommodate all the nuances of data management.