For years, business leaders have been under the spotlight to display tangible progress when it comes to environmental, social, and governance (ESG) initiatives. Despite growing consumer demand for action and a flurry of new corporate commitments, many business leaders are still struggling to develop and execute ESG plans and track and measure success.
According to our recent “No Planet B” study, 89 percent of people said it is not enough for businesses to say they are prioritizing ESG, they need to see action and proof. In addition, 96 percent of business leaders said they want to make progress on sustainability initiatives, and the vast majority (80 percent) remain frustrated and fed up with the lack of progress. Business leaders want to rise to the occasion and make more progress, but many don’t know where to start.
I recently connected with Pamela Rucker, CIO Advisor and Instructor for Harvard Professional Development and co-author of the No Planet B study, to discuss how business leaders can turn pledges and promises into action. Here’s a summary of our conversation:
Pamela: The first step towards making progress on ESG goals is having business leaders dedicate time to meet on a regular basis. Business leaders should establish an ESG working group that meets quarterly and is comprised of leaders at the highest level across each division of the organization.
This “ESG suite” ensures that there are leaders across each sector of the business taking accountability and producing results when it comes to the company’s ESG efforts. Without representation at the highest level, it’s far too easy to have these goals take a back seat, despite even the best intentions.
Pamela: Millennials and Gen Z will vote with their wallets and select employers according to their values. Companies need to make ESG a core competency of their organizations and have a sustainability-driven culture that is part of their operational backbone. A few examples of this include:
Pamela: Business leaders need to have pragmatic goals and benchmarks in place that are specific, measurable, and (most importantly) attainable. Leaders should start by establishing goals for the first year that are achievable to show early results. A few examples of these could include:
Pamela: 91 percent of business leaders surveyed noted they are facing major obstacles when implementing sustainability and ESG initiatives. The biggest challenges include obtaining ESG metrics from partners and third parties (35 percent); a lack of data (33 percent); and time-consuming manual reporting processes (32 percent).
Without one clean source of data, it’s nearly impossible to accurately measure and track progress across an organization and find efficiencies that drive progress.
ESG data is sourced from many systems across your organization, such as finance, HR, supply chain, and customer experience applications. With emerging technology such as AI embedded, these systems can become powerful recommendation engines that help to create more efficiency and reduce waste. As a result, business leaders should look to invest in solutions that allow them to connect, manage and standardize data across all systems to enhance planning and execution and accurately report on progress.
For example, an organization that manages supply chain data on the same platform as its financial data will be able to reduce costs and carbon emissions by finding the most efficient routes and transportation methods. At the same time, these connected systems would be able to quickly report GHG Protocol Scope 1, 2 and 3 carbon emissions to show the impact that increased efficiency in logistics operations has had on its ESG goals.
Pamela: Technology can now play a massive role in propelling ESG efforts forward. In fact, 93 percent of business leaders think artificial intelligence (AI)-based technology would be better than humans at making decisions about sustainability and social policy.
By tapping into AI and automation, business leaders can collect various types of ESG data without error, reduce the amount of time that goes into manually extracting and analyzing these key insights, better manage the complexities of integrating data across global supply chains, and uncover key sustainability insights that can increase their competitive advantage.
This makes it much easier for business leaders across all departments to collaborate, track progress, and identify clear paths forward to meet their set goals.
Pamela: To mobilize large-scale organizational change, there needs to be accountability. Being transparent with goals means clearly and publicly communicating where your organization currently stands, where it would like to be and the specific steps it is taking to get there. Increased transparency creates a distinct sense of responsibility and helps close the gap between intention and results.
Even when an organization misses the mark on certain goals, business leaders should still be clear with stakeholders and customers and use these missed steps to reflect on what needs to be changed. When major milestones are reached, this should be shared and celebrated as well! Acknowledging this type of achievement will add more momentum to the cause and stir up additional enthusiasm to push for even better results.
We all have some role to play in propelling our organization’s ESG efforts forward. By establishing an ESG suite, bringing employees into the fold, setting clear goals, having a single source of data, tapping advanced technology, and leaning into transparency, business leaders can truly make ESG a priority and accelerate progress.