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Major economies are moving at an unprecedented pace to fight climate change, including in Canada where we have committed to reducing greenhouse gas (GHG) emissions by 40 to 45% from 2005 levels by...
Major economies are moving at an unprecedented pace to fight climate change, including in Canada where we have committed to reducing greenhouse gas (GHG) emissions by 40 to 45% from 2005 levels by 2030 and achieving net-zero emissions across all sectors by 2050. That said, one of the biggest barriers to achieving these goals is the effective collection and analysis of data.
“While Canadian companies are taking leadership role and implementing standards aligned with global best practices, there is still a lot of work to do,” says Zlata Huddleston, Partner, Sustainability Practice Leader, IBM Consulting Canada.
Data management, analytics, artificial intelligence (AI), and digital transformation initiatives can play a key role in simplifying and standardizing ESG reporting processes. This includes the approach organizations take to securely collect and measure emissions and other climate-related data and analyze results to develop effective strategies to act on net-zero commitments.
Key findings of the report:
- Almost 3 in 4 executives (72%) view ESG as a revenue enabler rather than cost center.
- ESG “leaders” are 43% more likely to outperform their peers on profitability.
- Consumers are committed to sustainability, however, only 4 in 10 feel they have enough data to make environmentally sustainable purchasing (41%) or employment (37%) decisions.
- Almost 3 in 4 executives (73%) say their organizations struggle to manage an overload of manual data, while 7 in 10 say they have difficulty consolidating or manipulating data.
In a recent Institute of Business Value (IBV) global study, The ESG conundrum - based on surveys with 2,500 executives and 20,000+ consumers– shares insights from global executives on how their organizations are addressing the ESG challenge, what benefits they expect from ESG initiatives, and how they weigh sustainability against other business objectives.
According to Huddleston, “Executives consider Sustainability to be a top priority and revenue driver, and a majority of surveyed organizations have developed ESG propositions.”
Companies are investing in Sustainability and starting to see it as good for business. The argument that ESG hampers a company’s ability to boost the bottom line is more than a myth—it’s misinformation that leads to poor business decision-making.
The key is to see Sustainability as a transparency enabler. When viewed as a vehicle for driving business value—rather than a narrow reporting exercise—Sustainability generates insights that create opportunities and boost performance.
So what will it take to move the needle ESG transparency and sustainability performance?
- Stop making excuses. Get clear on your ESG objectives and what you are trying to achieve.
- Be transparent with data. Create an integrated ESG dashboard for shared visibility and performance management.
- Communicate clearly and honestly. Report on what is relevant from a materiality point of view, as well as what is required, without obfuscation.
- Scale, automate and augment. Automate ESG processes and reporting capabilities to keep data current.
- Advocate and orchestrate for change. Align with ecosystem partners on ESG metric definitions, standards and data governance principles.
- Capitalize on trust. Use your enhanced ESG posture to build trust, create new market opportunities and grow revenue.
“Most executives want to do the right thing and provide greater transparency to their stakeholders, but they struggle to manage ESG data, impacting their ability to measure progress and meet consumer demands,” says Huddleston.
IBM technology is helping play a critical role enabling a scalable, data-driven approach to pull together the right data, derive the right insights, and make decisions that progress both sustainability goals and core business operations.
A case in point: Canada-based Celestica is a leader in design, manufacturing and supply chain solutions for the world's most innovative companies. Despite initial success with its organization-wide commitment to driving sustainability, the company struggled to manually gather ESG data from its sites around the world. The company deployed IBM Envizi ESG Suite to consolidate and understand its ESG data and overcome its reporting problems. The new solution helps eliminate errors that arose from the manual approach to data entry. It also automates complex calculations and reporting, producing finance-grade, auditable data.
ESG is not a drag on business performance. Rather, it’s an accelerator that drives profitability and growth.