Operational Sustainability Management (formerly ESG Management) use case
Summarize
Summary of Operational Sustainability Management (formerly ESG Management) use case
The Operational Sustainability Management use case in ServiceNow enables organizations to establish, manage, and report on sustainability initiatives aligned with Environmental, Social, and Governance (ESG) principles. It supports setting up a sustainability program, defining and tracking metrics, adhering to regulatory frameworks, and generating comprehensive disclosures. This use case empowers ESG administrators, program managers, metrics administrators, and disclosure managers to collaborate and drive measurable sustainability progress.
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Setting up the Operational Sustainability Program
To launch the program, ESG administrators and program managers start by:
- Assessing materiality: Identify and document the most impactful material topics that matter to stakeholders and the organization within the Operational Sustainability Management application.
- Defining goals and targets: Establish broad, long-term sustainability goals aligned with company mission and stakeholder expectations (e.g., reducing greenhouse gas emissions, promoting diversity). Set specific, measurable, time-bound targets linked to these goals to track progress and accountability. Targets cover environmental, social, and governance dimensions.
- Scoping entities: Associate each goal with specific organizational entities to monitor progress effectively.
Defining Metrics and Data Collection
ESG metrics administrators define key operational sustainability metrics aligned with industry standards, such as carbon emissions, energy use, waste management, diversity, safety, and governance. Metrics can be:
- Manual (data entered by users)
- Calculated (derived from other data)
- Automated (collected through integrations or sensors)
Ensuring data accuracy involves implementing proper tracking systems and engaging stakeholders who provide data inputs.
Measurement and Reporting
Once metrics are collected, ESG metrics administrators and program managers monitor performance against predefined thresholds and objectives. They document any issues when targets are not met.
Program managers develop a reporting framework based on established standards such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and Task Force on Climate-related Financial Disclosures (TCFD). This framework defines the scope, disclosure protocols, and data requirements for sustainability reporting.
Generating Disclosures
ESG disclosure managers use collected and validated data to produce annual sustainability reports. These reports provide a comprehensive view of the company’s sustainability performance, highlighting achievements, challenges, goals, and future initiatives across environmental impact, social responsibility, and corporate governance.
The operational sustainability use case consists of multiple processes such as setting up your operational sustainability program, defining metrics, collecting data for metrics, adhering to regulatory frameworks, and generating disclosures.
Setting up the Operational Sustainability Management program
- Assessing materiality: Assessing materiality enables you to discern the most significant material topics and their respective areas of impact on your stakeholders and organization. Firstly, you identify the material topics that hold the greatest importance for your stakeholders and possess the most substantial influence. The identification of topics happens externally and then they are documented in the Operational Sustainability Management application.
- Defining goals and targets: As an ESG program manager, you can choose to create goals and targets for your material topics.
Goals and targets play a crucial role in driving and measuring the success of an operational sustainability initiative. Here's a brief explanation:
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Goals: Goals in an operational sustainability initiative are broad, long-term aspirations that define the overall purpose and direction of sustainability efforts. They are often aligned with the company's mission, values, and stakeholder expectations. Examples of operational sustainability goals include reducing greenhouse gas emissions, promoting diversity and inclusion, and improving corporate governance.
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Targets: Targets are specific, measurable, and time-bound objectives set to achieve the broader operational sustainability goals. They provide clarity and focus, enabling organizations to track progress and demonstrate accountability. Targets can be established for different aspects of operational sustainability, such as environmental impact, social issues, and governance practices. When you set targets, you must also specify the sources from where the target will obtain data.
- Environmental targets: These relate to reducing the company's environmental footprint and promoting sustainable practices. They can include targets for carbon emissions reduction, water and energy conservation, waste management, and adoption of renewable energy sources.
- Social targets: These focus on addressing social issues and fostering positive impacts on communities and employees. Examples of social targets include increasing workforce diversity, ensuring fair labor practices, promoting employee well-being and safety, and supporting community development initiatives.
- Governance targets: These targets emphasize the implementation of robust governance frameworks and ethical business practices. They may involve enhancing transparency and accountability, strengthening board independence, promoting responsible executive compensation, and ensuring compliance with legal and regulatory requirements.
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- Scoping entities: Each goal is associated to an entity that must be tracked for the progress being made.
Defining metrics
As an ESG metrics administrator, establish a comprehensive data collection process to gather relevant sustainability data across all operations. The data can be collected using metric definitions. The three types of metric definitions are manual, calculated, and automated. Identify the key operational sustainability metrics aligned with industry best practices, such as carbon emissions, energy consumption, waste management, employee diversity, workplace safety, supply chain sustainability, and corporate governance. Ensure data accuracy by implementing appropriate tracking systems and engaging relevant stakeholders such as data providers for manual metrics.
Measurement reporting
Once the material topics are identified, the ESG metrics administrator and an ESG program manager collect the metrics that are of utmost importance to the organization. You can report on the performance of these metrics against predetermined thresholds and objectives, as well as document any issues that arise when the metrics fail to meet the thresholds.
Reporting framework
As an ESG program manager, develop an operational sustainability reporting framework based on recognized standards like the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and Task Force on Climate-related Financial Disclosures (TCFD). The framework defines reporting boundaries, disclosure protocols, and data.
Generating disclosures
As an ESG disclosure manager, using the collected data, generate an annual sustainability report. The report provides a comprehensive overview of the company's sustainability performance, including quantitative and qualitative data. Highlight the achievements, challenges, goals, and future initiatives related to environmental impact, social responsibility, and corporate governance.