Since ESG remains a nascent management practice, companies don’t have precise best-practice playbooks to follow. Yet models of ESG management are emerging. Some companies are starting to use enterprisewide digital platforms to integrate all of their E, S, and G activities—from setting targets and metrics to data collection, auditing, and performance tracking.
Doing so, according to ServiceNow (the publisher of Workflow), can help companies advance ESG initiatives through four stages of maturity:
- Ad hoc: ESG-related activities are still siloed across the enterprise, with no formal ESG tools or processes.
- Disclosure-driven: Regulatory requirements and investor disclosure expectations help drive automation of manual data collection and annual ESG reporting.
- Governed: Executives lead formal tracking of ESG initiatives, governance processes, policies, and continuous monitoring and compliance.
- Integrated: ESG activities become embedded into daily work across the enterprise and instrumental in influencing everything from business decisions to executive compensation.
Graduating any ESG program to that level, of course, will take time. But for many companies, the facts suggest they need to speed up their efforts.