Reframing the C-suite’s view of ESG data

Yet knowing what data you hold and what new data pertinent to sustainability reporting requirements you need is only part of the equation. To truly maximise the value of robust data, the C-suite needs to reframe its view of data and what it can achieve. 

Targets shouldn’t drive data strategy 

In a perfect world, collecting data over several years gives you more reliable evidence for setting sustainability targets. In practice, short regulatory timetables and the desire for quick wins often lead to target setting without necessary and robust data availability. For example, companies may set themselves a target of cutting carbon emissions by 10% over five years. However, without the historical data that provides a baseline to measure and track progress, it’s difficult for companies to determine whether that target is realistic and eventually met. Of course, an organisation could hit or even exceed a set target. However, more often than not, such statements impact performance by influencing business decisions when an organisation struggles to meet targets or even reputational problems when targets are missed.  

Quality data provides the foundation for setting targets. To set realistic and achievable targets, companies need to collect valid and reliable data and test it comprehensively. Pilot studies should define measures and key performance indicators (KPIs) that develop ESG strategies and set realistic targets. 

Strengthen your licence to operate 

While the reporting timetable may differ based on whether you are a large organisation or a small to medium enterprise (SME), the main pillars of sustainability reporting apply to all companies. Large organisations may have to supply data for ESG ratings or satisfy investor requirements. In contrast, SMEs may have to provide sustainability data as part of a larger value chain, but the outcome is the same. The direction of travel means that every company, no matter what size or location, will eventually have to collect, analyse and assess data that supports ESG reporting requirements. 

In terms of a licence to operate, companies can view data as a necessary tool for sustainability due diligence or take a more dynamic view that reframes data as a driver to gain a competitive edge when tendering for public and private contracts.  

Meet the challenges and maximise opportunities 

The initial challenge is creating a roadmap which defines what data is needed and why. However, the data collection process presents an opportunity for a company to see itself through a different lens that can reveal a clearer pathway to new business opportunities. The level of internal collaboration required to extract all data points needed to define, develop and implement a sustainability strategy can be an enriching experience. It can help clarify purpose, break down silos, provide fresh thinking and showcase leadership qualities needed to roll out sustainability strategies successfully.  

Taking a similar approach to data collection across the value chain offers an opportunity to assess the performance of suppliers and external providers, highlighting additional business opportunities. 
Data quality and precision are critical to companies subject to the CSRD and the ability to successfully report according to European Sustainability Reporting Standards (ESRS). In addition, robust data availability gives internal and external stakeholders confidence that sustainability plans and targets are on track. 

Data is there to provide answers and evidence based on reliability and quality. Yet by reframing its view on data and what it can achieve, the C-suite can unlock hidden value and maximise opportunities.