It is critical that enterprises adopt environmental, social and governance (ESG) practices. Why data collection and analysis are key to this.
Climate change is on the minds of consumers and businesses across the globe. It has become increasingly important for businesses to not only commit to environmental, social and governance (ESG) practices but to be able to quantify the impact of those commitments.
When it comes to the “e” in ESG, the pressure to reduce businesses’ impacts on climate change has noticeably increased due to the SEC proposed reporting guidelines and ever-growing societal pressures from consumers, stakeholders and investors to buy and work with environmentally-conscious organizations.
Companies are quickly adapting and focusing on corporate social responsibility, notably when it comes to reducing their carbon footprint. A McKinsey report noted that almost two-thirds of Fortune 500 companies are working toward ambitious carbon reduction targets for 2050. These targets and goals are no longer just another metric to track. They have become clear strategic goals for long-term efficiency and impact.
ESG measures have also seen a spike due to the influence of climate change and social justice on investors. The lack of robust ESG data is seen as a hurdle for 46% of North American investors, according to a Capital Group ESG Global Study. And, 70% said that standardization of tools and data is needed to analyze and implement ESG initiatives. Clear, concise and consolidated data is the key to understanding the impact and developing data-driven strategies. The solution? Technology and AI. Data collection at scale
When it comes to tracking environmental impact, companies need data on energy consumption, water usage greenhouse gas (GHG) emissions, vendor efficiency and waste generation.
