When the idea of sustainable investing was born in the 1960s, it was a vehicle for supporting companies engaged in environmental and social good at a cost to their bottom line. Today, sustainability is measured in terms of environmental, social, and governance (ESG) issues—essentially, a company's green footprint. Sustainable investing is now a major driver of capital and corporate priorities. In fact, many companies now consider ESG a key component of their brand—protecting the planet, drawing investors, engaging employees, and engendering customer loyalty.
As climate change, global supply chain disruptions, and the current talent crunch have converged over the past two years, industry leaders are redefining best and turning these crises into opportunities for growth. The data and technology exist to make real and measurable change, so a shift to proactive sustainability planning can make an outsized difference in several ways.
Announcing that your company will be carbon neutral by a certain date may sound good, but it’s a massive undertaking that involves many moving parts and requires enormous investment. By taking ESG goals and translating them into actionable plans across the company, you can make continual progress that is assessable and attainable.
Whether it’s measuring carbon emissions, sourcing ethically produced materials, or managing the water usage in a manufacturing process, data on a broad range of metrics is captured, aggregated, and considered in ESG reporting. With the right platform and planning, businesses can shape the response to the climate crisis and build both experience with, and reputation for, good stewardship.
ESG is regularly covered in many earnings reports and annual statements. As much as profitability, having a solid environmental, social, and governance reputation is critical. Big investment firms are finding that companies must communicate their ESG priorities to draw investor interest; companies without good green credentials will find that when they want to raise capital, the cost is much higher.
Driving much of this shift toward sustainable investing are Millennials and Gen Z. Notably, they contributed $51.1 billion to sustainable funds in 2020—compared to less than $5 billion five years before.
The impact of the eco-friendly consumer cannot be overstated. Customers increasingly choose brands based on ESG priorities and reputation. An Accenture study of more than 25,000 consumers across 22 countries shows that the pandemic sparked a realignment of priorities. Buyers are abandoning brands that don’t align with their values and are willing to pay more for products from companies that do.
Telling stories about ESG efforts can attract new customers and help companies build strong brand loyalty, but authenticity and transparency are key. Organizations that engage in greenwashing—misleading the public about an eco-friendly product or practice—can pay a hefty price in reputational damage when customers spot baseless claims.
Attracting and retaining quality talent is a top priority across industries, especially given recent shifts in the labor market. Employees want more than competitive pay and flexible schedules. They want to work for companies with strong ESG values where they can feel that they’re contributing to a greater good.
The data collected as part of an ESG initiative can be leveraged to improve corporate culture and employee engagement; companies can use the information in their workforce plans, helping them to attract and retain diverse talent and support equity and inclusion. ESG metrics can also facilitate mentoring programs, guide professional development, and reshape the way employees interact internally and with customers.
ESG is not just about reporting, but also being able to create plans that track, monitor and can be adjusted to reach your sustainability goals. Effective ESG planning begins with a platform robust enough to collect, standardize, and aggregate data for the vast number of metrics involved in ESG reporting. Oracle Cloud Enterprise Performance Management (EPM) handles the massive chore of collecting and managing this information, in a way that business units can understand and reach their individual ESG targets. The planning capabilities in Oracle Cloud EPM help them break down those ESG goals into actionable plans across the business, be it supply chain operations, or other lines of business, and understand the financial implications of each plan on a broad range of topics, including renewable energy investments, workforce compensation, diversity, and carbon emission reduction.
To help customers make sense of their data and drive results, Oracle Cloud EPM combines robust reporting capabilities such as dashboards, charts, management and narrative reporting, so you can analyze your ESG data and track performance, as well as satisfy multiple ESG regulatory reporting formats like GRI, SASB and others. The real opportunity, is having your ESG metrics in a single platform, you are able to use real-time performance insights and predictive planning, to set your ESG trajectory and track progress with connected data from finance, operations, and other lines of business. This connected planning approach lets you immediately visualize the impact that changes are having across your business, and make adjustments when obstacles arise. When it comes time to report on your ESG progress, graphic-rich narrative reporting tells the story to stakeholders.
With built-in machine learning and advanced analytics, Oracle Cloud EPM helps you:
Combatting climate change and saving the planet are not small tasks, but the technology exists to reimagine the relationship between business and the environment. By leveraging data about ESG, companies are transforming their corporate cultures as well as their carbon footprints, and their success is encouraging more and greater interest in sustainability at organizations of every size.
Oracle Cloud EPM offers you a comprehensive solution that helps you plan, manage, and report on your ESG practices.