Around 68% of organizations globally have put in place specific roles to oversee ESG reporting and initiatives. Almost 75% organizations have started formally reporting on their ESG, climate and sustainability or corporate social responsibility data over the last three years, according to a recent survey among 1300 organizations across US, Singapore and 11 European countries, commissioned by Workiva and conducted by research agency, Coleman Parkes.
This is not surprising considering that most organizations feel ESG reporting has generated a positive impact across customer retention and recruitment, cost savings, insurance or credit agency engagement, and reduced long-term risk.
Despite the upswing about ESG and acknowledgment of its positive impact, as many as 63% of decision makers currently feel unprepared to meet their ESG goals and government and regulatory reporting mandates.
Tech to the rescue
No marks for guessing what can close that gap. There is a clear need for ESG reporting to be simplified through technology. The realization is dawning on the ESG decision makers. As many as 76% of them believe technology is important to compiling and collaborating on ESG data.
The advantage of technology is not restricted to only compiling and collaborating on ESG data. The biggest advantage of technology is seen in the areas of mapping disclosures to regulations and framework standards (85% believe so) and supporting ratings investor, customer RFPs, and stakeholder questionnaire responses (84%).
So, what are the advantages of having the right technology in place? Most respondents (35%) feel it helps them being more efficient while many believe that it helps them create sustainable growth (33%).
Unfortunately, despite knowing the pivotal role technology has to play in collaborating to report effectively, half (55%) of decision makers do not feel their organization?s departments have sufficient tools to provide the right ESG data. One in five (19%) think that their organization does not employ technology suitable for managing the ESG reporting process and program initiatives. 30% of those blame their legacy IT systems, saying they are incompatible with new required technology. Part of the problem is understanding: a quarter (27%) say they don?t fully know what technology is available or needed.
It is clear from the research that businesses understand the value of technology but aren?t yet using it to its full potential. Failure to invest will eventually lead to businesses falling behind and diminish their ability to demonstrate a high level of ESG performance to stakeholders.
Only a third (35%) believe they can use technology and data very well to make decisions on advancing ESG strategy at the moment, indicating there is significant scope to improve efficiencies and performance in this area.
CIOs to the rescue
So, who are the stakeholders that influence the decisions on the purchasing and utilization of ESG Reporting and Data Management technology?
Today, it is largely designated ESG Leaders/Chief Sustainability Officers/Chief Corporate Responsibility Officers who make that decision. As many as 38% say they make the decision on ESG reporting and data management technology. CIOs follow closely ? they take decision in 33% of cases. As technology becomes more mature and complex ? with 27% acknowledging that they don?t fully know what technology is available or needed ? the decision making is likely to shift more and more towards CIOs.
So, CIOs, get ready. ESG may just be your next big priority area.