ESG Data Helping Your Company beyond Sustainability
When ESG, shortening for environmental, social, and governance, is mentioned, what runs through your mind? For most investors and managers, it is the stringent requirements for disclosure, regular reporting schedule, and emerging regulations. Indeed, this viewpoint makes many companies see sustainability reporting as a heavy load to carry. It is true there is some cost to be involved, but the long-term benefits make any related expense almost insignificant. Indeed, ESG sustainability reporting can help your company way beyond the disclosures. The question to ask at this point is, “Are you using ESG sustainability reporting data fully?” If your answer is “no,” keep reading as we explore unique ways that the details can help your brand beyond sustainability.
Use ESG Sustainability Reporting Data to Enrich Your Cost Analysis and Budget
When you gather, analyze, and present ESG data, it can be used even in other areas of company operations. When the data is combined with other information about your business, it becomes very useful for planning and strategy formulation. For example, you can combine it to see how it impacts the business finances to create budgets, predictive forecasts, and variance reports.
Let’s take an example here. Suppose you run a company that wants to shift to recycled raw materials with an overall goal of addressing the larger problem of pollution. This move will have implications on the entire production line because different machines have to be adapted to the new material type. It would also come with financial implications, supply chain-related impacts, and delivery timeline changes.
Being able to look at ESG data alongside other business planning aspects is important in driving your overall sustainability agenda. We must say that in the long-term, this becomes very profitable. It will yield even better results when the entire business system adopts it so that the application of best practices becomes intuitive.
Transform Your Operating Model to Promote Sustainable Growth
As we pointed out at the start, many people usually think of costs that come with sustainable operations. However, you can change that narrative by using ESG sustainability reporting to create additional revenue streams. So, how exactly do you do this? We will demonstrate this using the example of global warming.
Today, global warming presents a huge threat to humanity, and every global organization is calling for efforts to address the problem. Now, you can turn this into an opportunity by calling investors to channel more funds into your sustainable business efforts. A real estate entrepreneur might convince investors to inject additional capital into green building designs.
Using ESG sustainability reporting allows you to identify important drivers for success, such as combining energy sources to keep the cost of operations low. For some organizations, sustainability might include opportunities for new product design, building a diverse workforce, and supporting social justice in society. See: these efforts will not only be good for the planet, but will improve the brand and increase profitability.
Applying ESG Data to Address Risks
The first step in ESG sustainability reporting is a comprehensive review of a company to determine the key risks and opportunities. Therefore, we must say that ESG and risks in a company are interlinked. The assessment can help you to pinpoint key challenges, such as ethics and credit risks, that might be strangling the company’s growth. These are the areas that will be brought to the top leadership of the company for action, especially through funding and new strategy formulation.
As you can see, ESG sustainability reporting comes with so many benefits, and no matter the approach, there is a way to get more from it. Remember that for you to be able to get better results from ESG reporting, it is vital to have the appropriate software. If you are entirely new to matters of ESG reporting, consider working with a professional. Visit Diginex.com to learn more about ESG and select the best sustainability reporting program suitable for your company.