Over 70% of consumers in electronics, automotive, building, packaging, and furniture, among other niches, are willing to pay more for products from companies focused on ESG sustainability. Furthermore, putting additional focus on Sustainable Development Goals (SDGs) can unlock up to USD 12 trillion every year on the global level. These are mind-boggling numbers that show ESG sustainability or sustainable operations come with huge potential for companies, but getting it right is never easy for many companies.
The secret to high-quality sustainability reporting is going tech. With ESG tech, your company is able to adhere to standards outlined in different frameworks and report to multiple entities. We have to agree that it comes at a cost, and this might be a concern for you, but the benefits in the long-term make the expenses almost insignificant. Keep reading to learn how to apply ESG tech to achieve sustainability goals for your business.
How Does ESG Sustainability Work?
ESG sustainability reporting is a relatively new term because it is only recently that more parties have started adopting it. In the recent COP26 UN Climate Change Conference in Scotland, one of the major recommendations was to strengthen ESG sustainability reporting. Now, it is only a matter of time before every country makes ESG sustainability reporting mandatory, and this trend has already started.
The EU has already passed Taxonomy Regulations in 2020, the UK is calling all companies to start reporting their ESG impacts using the TCFD framework by 2025, and stock markets like NYSE and HKEX require sustainability reports for listed companies. Other states, including Singapore, Australia, New Zealand, Japan, Brazil, and India are all in the race to strengthen their green policies, and you do not want to be slapped with penalties for non-compliance.
It is time to go ESG, and using the right technology to gather/ analyze data on carbon footprint reduction, among other considerations, and create the final report will come in handy.
ESG is the process of disclosure and communication of a company’s sustainability-related information in three areas, environmental, social and governance. The information is prepared for stakeholders, such as investors and customers, to see the effort and make the decision whether to work with, buy from, or invest in your company. Note that it is not simply about creating reports but changing the operating design (call it a sort of recalibration) of your company so that it adopts a responsible and sustainable way to help people and save the planet.
Does the company allocate enough funds to reduce its negative environmental impacts? Is it using the latest technology to improve efficiency in the production line? Is the company management following the latest insights, including the best practices in services or product production? These are only a few questions that you must ask when focusing on how ESG sustainability works or will be applied in your business.
ESG Tech to Boost Your Course for Sustainability
Now that you know the urgency and importance of ESG reporting, trying to do it with standard programs is likely to fail. It will be too complex to factor in dozens of parameters, such as maintaining contact with all authorized members for ESG reporting, following up with different financial and non-financial factors, and maintaining a clear map for verifiability.
This is likely to plunge your company into the abyss of greenwashing, which can scare investors and drive away consumers in droves.
You do not want that, but how do you implement ESG tech?
Here are some useful tips that your company can adopt to correctly adopt and deploy ESG tech:
- Start by focusing on IT-specific company domains: Here, we would suggest you target areas such as paperless transactions lik digital financial receipts, e-waste, energy efficiency, supply chain, and material efficiency. Consider adopting models such as cloud use, power management, and cutting down the device use per staff.
- Align company only to what is material: In this case, consider working with other leaders so that operations are aligned to high material issues. You might want to borrow the application of Taxonomy legislation in promoting accountability. Good examples include cutting down carbon footprint in the supply chain and digital ethics in product design & business model.
- Apply digital technologies to address business material risks: Some good examples at this point include using reusable packaging to cut down wastes, sustainable sourcing, and product transparency. Product lifecycle also falls within this category. Make sure to enter data on every material risk to be sure of generating the best report for stakeholders.
As you can see, ESG tech can fit articulately with your business model because there are different applications. Remember that these initiatives need to be reported with accuracy right from inception to implementation. Again, this should include both the positives and negatives for a balanced and accurate report. With Diginex.com experts and sustainability reporting software, ESG tech will catapult your enterprise to the next level and help in saving this planet.