Meaningful ESG goals require long-term proactivity. Acting on sporadic initiatives or projects, due to external regulatory pressures, isn’t enough. One-offs to provide a positive corporate snapshot won’t cut it. Instead, companies need to take responsibility for enhancing ESG performance. Outside-in commercial balance needs to be paired with inside-out motivation to do, and be, better.
That’s the big picture. But what about the practical, granular, day-to-day realities of continuous ESG focus, accountability, and transparency? It comes down to clear, intelligent ESG goal setting.
What are ESG goals?
Firms have a responsibility to minimize investment in non-sustainable activities, increasing it for sustainable activities. Examples of corporate ESG goals include:
- Reducing greenhouse gas emissions
- Increasing diversity and inclusion within the workforce, including at board level
- Improving health and safety for employees
- Making company offerings and products more sustainable
- Supporting social causes, giving back to communities within a firm’s value chain
To track the data you need to achieve ESG goals, implementing the right software is an essential early step.
ESG goals: Long-term sustainability and competitive advantage
Real change occurs when sectors reach a tipping point: Where ESG leadership is synonymous with competitive advantage and market preference. This drive has to come from within.
Beyond its environmental, social, and moral imperatives, ESG represents vast business opportunities:
- Developing new (international) ventures and offerings
- Cost-reduction via lowered emissions and circular processes
- Qualification for loans and subsidies
- Attracting forward-thinking, driven talent
And if organizations fail to rapidly evolve ESG policy? They risk fines, shredded brand reputation, and stakeholder abandonment: Employees, clients, and investors all increasingly focus on ESG.
How to understand your company’s current ESG performance
Hire external experts to establish your firm’s ESG baseline. Specialist providers such as Sustainalytics will assess and score your firm based on your ESG disclosures. From there, you can begin to establish further data to be gathered, and actions to be taken. (In the longer term, you’ll ideally have this expertise in-house.)
Relevant ESG standards and regulatory bodies will depend on your firm’s jurisdiction. For example, the European Commission sets the European Sustainability Reporting Standards, due by summer 2024 for financial firms.
How to develop your ESG action plan
To make this tangible, we’ve included examples demonstrating how we worked through this process ourselves at DXC. We use ServiceNow’s ESG software, which we also support our clients to roll out.
- Set a clear scope for your company ESG goals
Prioritize your most critical and visible ESG data to establish your data management and reporting base. Starting with your most visible, external ESG data is key as, if you’re already publishing this data, it’s essential to demonstrate how it was sourced, calculated, and approved.
At DXC, we began with 2 disclosures representing a broad set of data (disclosures aren’t the end state, but they do provide a valuable framework for your ESG compliance requirements). We then worked backwards to arrive at the data architecture we needed to support those disclosures.
- Establish your ESG data architecture
This is a key component of the ServiceNow ESG data management solution. Optimized data architecture drives it all: Your data granularity, collection approach, frequency, data re-use and approval strategies, and your data owners’ accountability.
Our ESG team identified ServiceNow architecture that would cover ~80% of our overall data needs. This let us move quickly and decisively towards a production solution. In defining our data architecture, we kept automation strategy and data re-use capabilities front of mind.
This breaks the inefficient cycle of one-off ESG reporting: No more gather, publish, gather again. Instead, rolling data updates allow you to consistently, flexibly, and transparently report on your corporate ESG goals.
- Source your ESG data
At its core, ESG is a data consolidation challenge. It spans a vast range of topics, data sources, and collection and validation methodologies. The key data for achieving your company ESG goals may stem from HR, Finance, Customer Service, Risk & Compliance, Supply Chain, Facilities, IT Estate, Utilities, and beyond.
Due to this, ServiceNow ESG software has flexible mechanisms for populating your ESG data architecture. It meets your firm where it currently is regarding ESG, then allows automating further over time:
- Leverage workflows to interact with your data owners and collect data through ServiceNow’s interface
- Use spreadsheet uploads, if they will be hard to retire short-term
- Benefit from standard integrations within ServiceNow, or custom integrations based on your data needs
Once the data required to work towards your ESG goals is collected, controlled, and secured, ServiceNow stores it so it can be used across multiple outputs. ServiceNow empowers companies to use consistent, validated data to create leverageable assets, publish ESG performance, and advance towards ESG goals. Move away from siloed views, to broad, consolidated ESG visibility.
- Develop an ESG roadmap to support your strategy
Time now to leverage your ESG data and its extended capability. This could include:
- Developing targeted insights to improve receiving and analyzing data, to more quickly prioritize emissions-reduction initiatives
- Identifying profitable circular business models (for example, recycling marketplace products; manufacturing with recycled raw materials)
How to track your ESG progress
Relevant standards/regulations, and accompanying KPIs, will entirely depend on your sector and geography. However, for all firms, a double materiality assessment is key: You need to look beyond your firm’s ESG impact to your full business ecosystem.
How do your clients, providers, and competitors shape up on ESG — and how does this ultimately affect your firm’s ability to make ESG progress? Ultimately, ESG needs to be part of your forward-thinking, holistic corporate risk management.
Achieving ESG goals: Common challenges and strategies to overcome them
Leadership must breathe ESG
If not, your ESG strategy won’t work. Trusted, respected voices within your organization must be on board. Don’t allow ESG to be siloed as a secondary business topic. It isn’t — it’s vital. At DXC, we support our clients to spark and evolve the change management processes needed here.
Recognize the data challenge
Ensuring internal ESG data accuracy is a significant task in itself. But 70-80% of your required ESG data may exist outside your organization. For finance firms, this poses a particular hurdle: The bulk of reporting requirements fall within Scope 3, relying on accurate client/vendor data provision. Start by getting your own ESG data in order, with the right software and clear strategy. Then focus on ecosystem mapping and outreach across your value chain.
Achieve your ESG goals with DXC and ServiceNow
Need help to set challenging but realistic ESG goals? Having completed over 7,000 ServiceNow implementations across clients worldwide, we’re experts in how technology can close the ESG business gap.
For advice, do reach out to our team.