Contributing authors: Joe Russo, IIM Account Executive; John Adamczak, Global Client Executive; Dan Gabriel, National Solutions Consultant
We have all heard the term “digital transformation (DX)” and have experienced it in many ways:
The result of prioritizing DX strategies is a more efficient business operation with access to information for reporting and analysis for better tracking and decision-making.
ESG – Environmental and Social Governance
The next wave of businesses’ concerns revolves around sustainability – the sense of what can be done with the internal workings of the company to demonstrate performance-to-plan for ESG considerations. To improve their sustainability footprint – or sustainable transformation (SX) – regulated businesses, such as utilities, have been facing challenges from customers, investors and regulators on how to improve and document their ESG performance.
“…all enterprises are being pushed to transform and fundamentally change the way they do business to become sustainable enterprises. Owing to increased pressure from customers, investors, and regulators, organizations are beginning to understand the business cases for sustainability.”
-Dan Versace, research analyst ESG Business Services, IDC,
“Worldwide Spending on ESG Business Services is Forecast to Reach $159 Billion in 2025.
When adding the sustainability layer into business operations, organizations need to rethink how they are supporting their initiatives to demonstrate SX success. We suggest a simple process to outline goals, needs, and gaps.
DEFINE – Corporate sustainability efforts need to take the forefront as a business strategy demanding focus, attention, and, for organizations governed by rules and compliance regulations, an organized effort. These activities ultimately reveal challenges on identifying the focused areas for sustainability within the organization and on how to support their compliance for the ESG disclosures. This is a strategic function within the organization.
ALIGN – Evaluate ESG focus areas. Match activities with reporting challenges and prioritize. Investigate, organize and seek to understand technology solutions that improve/enhance the reporting process. It is important for an organization to have an idea of where their current processes fall short in providing the required performance data/information, especially if the SX initiative has been supported in the past by manual processes.
ADDRESS – Make the commitment to use data and technology to advance documenting ESG performance for sustainability-linked activity and to assess gaps in data & reporting tools. At Konica Minolta, we assist organizations in assessing their ESG technology gaps. With the goal of helping our clients’ meet their ESG priorities we provide solutions with the relevant tools to ease compliance tracking and reporting through a DX lens, and support efforts to better fulfill performance reporting.
Identify, Prepare, Plan, Implement
Ideally, organizations have already been addressing their sustainability efforts and have made SX an integral part of their corporate communications. Their current state needs some refining that DX can provide.
“Those organizations that develop and implement plans to better internalize and address their environmental and social impact stand to thrive in the years ahead as leaders in the sustainability space.”
-Dan Versace, research analyst ESG Business Services, IDC,
“Worldwide Spending on ESG Business Services is Forecast to Reach $159 Billion in 2025.
Whether creating or transitioning to a more formalized process, globally, we are at a pivot point. Organizations are planning spending around ESG efforts and recognize that they have to implement both policy and processes to ensure stakeholders and government entities are satisfied.
Key areas to address
Viewing sustainability through the DX lens – means that areas sometimes overlooked now have a significant contributory role in the overall ESG strategy. We have identified several areas where we have helped organizations obtain the data and improve operation so they can successfully fulfill ESG performance reporting needs.
ENVIRONMENTAL – Environmental Sustainability may include the following:
SOCIETAL – We break down the Societal category into Health and Safety and Diversity/Equity/Inclusion/Belonging (DEIB), which often falls under the domain of Human Resources. This category tends to be the most visible to employees.
Health and Safety may include:
DEIB may include:
GOVERNANCE – Data governance which includes records management and asset retention in accordance with a schedule agreed to by senior management is often overlooked. “We save everything!” is not truly sustainable for the long-term.
Reporting for ESG continues to evolve, and it is for this very reason that organizations need to recognize the need to put solutions in place to support their transparency. Organizations face financial risk by side-stepping the significance of ESG to the market and are compelled to not only revise their industry practices, but augment their DX strategy with a SX strategy. Investors are watching for this.
Supporting the framework and standards
Ultimately, the role of technology will be apparent to all who formalize their ESG performance tracking. Gathering information with an interdepartmental flavor is not typical. Breaking out data from one silo to another means greater attention is needed to the content and its accessibility to generate the ESG outcome.
Konica Minolta has the tools and support mechanisms to enable organizations to better meet their ESG reporting and tracking needs – as a focused initiative for leadership to embrace. For more information, visit us online.
