Companies are under significant and mounting pressure from investors, regulators, and other stakeholders to collect, use, and disclose “investment grade” enterprise ESG performance data.
Fortunately, findings from a recent survey conducted by the McNees Group, a boutique enterprise ESG performance measurement, management, and reporting consultancy, together with the Florida State University Jim Moran College of Entrepreneurship (FSU JMC) suggest that major corporations spread across the U.S., U.K., E.U., and other markets are rising to the occasion. The number of companies issuing disclosures of ESG performance data via the TCFD, CDP, and other mainstream voluntary frameworks is growing at a healthy clip.
But there’s evidence that current practices aren’t passing muster. Investors are proving dissatisfied with the decision-usefulness of companies’ ESG disclosures. And there are reports that business leaders are struggling to accurately measure and effectively manage their companies’ ESG performance, let alone incorporate ESG performance management considerations into their broader corporate strategies.
Yet, as detailed in a new eBook from Benchmark ESG, The Benefits of Utilizing Enterprise ESG Performance Data, business leaders can meet their investors’ expectations and put their ESG performance data to better use with a change in approach.
Enterprise ESG Program Development & Implementation:
As substantiated by the McNees Group-FSU JMC survey findings, approaches to defining ESG performance goals, developing corresponding action plans, and implementing enterprise ESG programs are irregular across companies. The survey finds considerable variability in the voluntary frameworks companies use to disclose their ESG performance data, as well as in the decision criteria companies use to determine their ESG performance management priorities.
In consequence, investors are not only left with incomparable disclosures from companies, but these companies risk allocating resources toward the management of irrelevant ESG issues.
Enterprise ESG Program Operationalization & Management:
Among the survey’s more significant findings are those that speak to how companies collect, analyze, and disclose their ESG performance data, as well as their awareness of the challenges such practices yield. Across the board, survey respondents reported difficulties with ESG performance data management and reporting. Relatedly, the survey suggests business leaders are over reliant on manual, spreadsheet-drive data management and reporting processes. As a result, companies are opening themselves to unnecessary financial, reputational, and regulatory risks.
As the eBook explains, these risks stem from the inevitable human error and delay in manual, analog processes for data collection, taxononimization (i.e., digital tagging), collation (i.e., organization), storage, retrieval, and analysis.
ESG Performance Data Collection, Utilization, and Disclosure:
Technical pursuits in need of technological upgrades
Business leaders can easily overcome the challenges they face in enterprise ESG program development, implementation, operationalization, and management. But it will require them to migrate their ESG performance data collection, management, analysis, and reporting processes to more adequate technological systems.
As detailed in Benchmark ESG’s latest eBook, there are three primary digital technologies that companies ought to consider. Briefly, they are cloud-supported, artificial intelligence-integrated digital platforms that equip their users with:
- Cross-Functional Communication Channels
- Digital Systems of Record
- Big Data Analytics Capabilities
In brief, these are the operational data collection, workflow management, and ESG performance analysis tools that business leaders need to bring resilience, efficiency, and credible effectiveness to each component of their ESG journeys.
For more on the functionalities of these technologies and their durable value-add, download the full eBook here.