The world of environmental, social, and governance (ESG) is all about moving from intent to impact while creating long-term value for businesses. Many companies are struggling to keep up with the overwhelming demands of ESG reporting, implementation, and initiatives.
I recently had the pleasure of attending and speaking at two ESG-focused events: Hannover Messe and ESG Europe. Of the many topics and issues discussed, one thing was clear across the board: The highly fragmented reporting landscape in Europe and around the world is hindering progress in the ESG space.
This shifting landscape puts pressure on the already-overtaxed small teams responsible for operationalising ESG at scale. The European Union’s (EU’s) Corporate Sustainability Reporting Directive (CSRD) and growing recognition that ESG considerations offer both risk mitigation and value creation opportunities to companies that take it seriously over the long term are good examples.
Many factors are at play: lack of a unified global standard, confusion around mandatory versus voluntary disclosure, and varying requirements at the local, national, and global levels. For multinational corporations, this becomes an even greater challenge as they struggle to meet changing requirements across borders.
The introduction of the EU CSRD, on top of other confusing regulatory frameworks, is burdensome—and we haven’t even seen how localisation will affect the regions.
According to future-facing law firm CMS, “The reporting standards comprise 82 disclosures with phasing-in periods for several areas. There are 1,144 data points that may need to be reported on, dependent on how material they are assessed to be.”
When ESG teams spend all their time reporting and telling the story of the past, it’s hard for even the most dedicated teams to write the future. And there’s never been a more important time to prioritise ESG. Strong ESG propositions have been linked to cost reduction, regulatory and legal interventions, productivity enhancement, investment and asset optimisation, and value creation across top-line growth.
Now more than ever, as we wait for harmony in the regulatory space, we need a more efficient way to showcaseprogress in ESG. That’s where technology comes in. Technology-enabled solutions, such as ServiceNow ESG Management, can help ESG teams manage and measure risk and master the challenge of reporting. Tech can help overtaxed teams keep pace with the ever-changing regulatory landscape.
Beyond regulations, technology can enable companies to create real solutions to climate change. It has the power to address climate change goals, carbon sequestration, and net-new energy sources—and enable just corporate transition.
It also holds the power to remove friction and create greater efficiencies in these programs and reporting. Technology can help teams move from reporting on the past to achieving their missions for the future.
I was struck by something Markus Müller, chief investment officer at Deutsche Bank, said: “This entire thing is about resources—environment, society, labor, policy, governance. These are indicators we need to transform our society. We have limited resources, and we'd be naive to say we are not dependent on the things we are embedded in."
Everything in our world is dependent on the planet we inhabit—and we’re breaking the machine that sustains us. The first step toward creating positive change and a better future is embracing tech-enabled solutions to ease the strain of reporting and inspire others with stories about the endless possibilities.
Find out how ServiceNow helps organisations manage ESG to create value.
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