Stakeholders Demanding ESG Commitment
One of the most noteworthy trends in recent times has been the spotlight put on an organization's Environmental, Social, and Governance (ESG) performance and communication with all concerned stakeholders. C-level executives are frequently being asked to communicate with an array of internal and external stakeholders, including such internal audiences as employees, the extended executive management team, and even the board of directors. In a 2020 survey report published by Deloitte, about 50% of the companies experienced strong demand from employees, as the single largest stakeholder group, to disclose ESG performance. Board of Directors were the second most active stakeholders with about 42% of the companies identifying these internal stakeholders as a group demanding ESG disclosures. Externally, stakeholders may include investors, shareholders, customers, recommenders, and other influencers.
Spurred by such a diverse set of stakeholders, many of the large or publicly traded companies are taking the lead in reporting their ESG performance. According to the data compiled by the Governance and Accountability Institute, just about ten years ago, only 20% of companies in the S&P 500 were reporting ESG data in the public domain. By 2019, more than 90 percent of companies were reporting their ESG performance. Nearly 50% of companies have adopted the Global Reporting Initiative (GRI) standards, which require organizations to understand and communicate their impacts on such issues as climate change, human rights, and corruption. About 25% of companies have started adopting the new SASB standard - the Sustainable Accounting Standards Board, and 65% of all companies are reporting to various third-party agencies for their carbon disclosure.
Image Source: The Governance and Accountability Institute
There is a similar public reporting trend taking place globally. In its 2020 Survey of Corporate Responsibility, KPMG reported that 80% of the top 100 companies (by revenues) in the 52 countries that were covered in the study are already reporting in the public domain. Additionally, 96% of the G250 (the world’s 250 largest companies by revenue as defined in the Fortune 500 ranking of 2019), are reporting their data and communicating their environmental performance in the public domain. Whether or not companies are reporting this information now, at a future point, they will be expected to share these data points, whether it be with customers or the general public. In the last three years, 30 percent of the N100, or the top 100 companies around the world, and the G250, or the largest 250 companies globally, are now reporting their environmental performance.
Communicating Trustworthy Data and the Role of Technology in Breaking Data Siloes
It is abundantly clear that companies and executives are being held responsible for communicating their ESG performance with a wide range of public and private stakeholders. However, a critical component of this communication is the availability of trustworthy data. In a typical organization, your ESG data might be locked in a diverse and distributed set of functional, departments, geographic, or other kinds of siloes. In a typical corporate environment, a waste vendor will dispose of hazardous waste or recyclable waste. The Finance Department manages the invoices for utilities or water consumption. The challenge for the environmental professional is how to gather pertinent data across multiple clients, multiple facilities, across the United States, or across the world, and to ensure that the method for data collection makes sense and is accurate. Digital ESG data intelligence platforms, like ProcessMAP, play a critical role in seamlessly collecting, aggregating, and enforcing data accuracy, including all the emissions calculations and normalizations. Digital ESG solutions work much the same way that digital tools do for accounting and financial systems.
To learn how ProcessMAP can help you manage and report ESG performance, sign up for a free trial today!