Without Data There Is No ESG
It’s likely that the business you work for has an ESG policy. Is it just a corporate spiel? Well, hopefully not. Given the state of our planet, business leaders are doing more to bring ESG policies to the forefront of mind to ensure that action is taken. But what really is it and how can it help us to act more responsibly?
What is ESG?
ESG stands for Environmental, Social, and Governance, which are three key areas used to evaluate the sustainability and ethical impact of investments and companies. The meaning and purpose of ESG are as follows:
Environmental:
This aspect of ESG considers a company’s impact on the environment, including its carbon footprint, resource use, waste management, and environmental risks. Companies that score well on environmental factors typically have strong sustainability practices, use renewable energy sources, and have policies to reduce waste and pollution.
Social:
The social aspect of ESG considers a company’s impact on people, including employees, customers, suppliers, and communities. This includes factors such as labour practices, human rights, diversity and inclusion, health and safety, and community engagement. Companies that score well on social factors typically have a strong culture of ethics and social responsibility and invest in programs that support their employees and communities.
Governance:
The governance aspect of ESG refers to a company’s management structure and practices, including its leadership, board of directors, compensation, and shareholder rights. Good governance practices include transparent and accountable decision-making, independent board oversight, and alignment of executive compensation with long-term performance.
Why Should ESG Be a Business Priority?
The purpose of ESG is to provide a framework for evaluating investments and companies beyond financial performance. By incorporating ESG factors into investment decisions, investors can identify companies with strong sustainability and social responsibility practices, which can potentially lead to better long-term financial returns.
Companies that prioritise ESG factors can also benefit from increased stakeholder trust and loyalty, improved brand reputation, and reduced risk of regulatory and legal actions. Additionally, ESG considerations can help drive positive environmental and social impact and contribute to a more sustainable future.
The Importance of Data.
Without correct and efficient data, from smart reporting technology, there is no ESG. A recent study has revealed that almost 75% of senior decision-makers based in the UK lack confidence in the data being presented to stakeholders regarding their company’s sustainability efforts.
The global poll, conducted by software-as-a-service (SaaS) company Workiva, surveyed 1,300 senior leaders, including 100 participants from the UK. Of the UK respondents, 63% felt that their organisations were unprepared to achieve their environmental, social, and governance (ESG) goals.
The biggest reporting challenges highlighted by the participants were related to greenhouse gas protocols for measuring scope one, two, and three emissions, as well as achieving investor-grade carbon disclosures.
This is why decision-makers are increasingly appreciating the importance of adopting ESG data analytics and the use of smart monitoring in their processes, recognising technology as the solution to the lack of clarity and understanding when it comes to ESG data.
What can Invisible Systems do to help?
Using the Internet of Things (IoT) to monitor ESG across your business could be your way forward. An IoT solution such as the I-System by Invisible Systems enables you to measure energy usage, and encourage employees to reduce their energy waste around the office and use air quality monitoring to provide the data needed to assess the health, safety and well-being of your employees around the office space. In addition, being able to control assets from a distance and get immediate alerts can help make decisions quickly and effectively. This allows for proactive measures to be taken instead of just reacting after a problem occurs.
Integrating multiple monitoring points throughout your business is a way to collect the data needed to make smarter decisions and improve your overall ESG score across the organisation.
To find out more about how you can improve the health of your organisation across divisions and improve company-wide ESG, Why not book a consultation with a member of our expert team? They’ll guide you through the process of integrating the I-System into your organisation and the benefits it can lead to.