The impact of technology on ESG
We are living in an ever-evolving digital age. The rapid growth in the digital economy and its array of supporting technologies have created a number of new challenges for businesses, including (but not limited to):
- Adapting to new regulations
- Attracting investors
- New workplace practices
- Keeping pace with competition
- Balancing all of this with managing environmental and societal impact, while maintaining business growth
Changes in workplace technology are a reflection of our wider society, which has become far more tech savvy and tech dependent. From smartphones to smart homes, technology is and will continue to be the biggest growth market and biggest opportunity for businesses willing to innovate and grow with a changing world. This change and growth has, undoubtedly, had an impact on the ESG landscape with consumers, employees and investors now more connected than ever to the world around them. So, what’s the impact of technology on ESG?
Consumer & employee perception
According to a 2021 study by IBM, 90% of consumers said that the pandemic affected their views on environmental sustainability, with 71% of employees and employment-seekers saying that environmentally sustainable companies were more attractive to them as employers. A 2022 survey by Navex Global found that 83% of respondents agreed that a business’ brand reputation is impacted by ESG factors.
It’s clear that the societal shift in recent years to a more environmentally-focused global ethos has meant consumer habits and attitudes are changing; people care more about the ethics of the companies they do business with and as businesses change to keep pace with this there will, undoubtedly, be impact across supply chains, investment networks and even staff recruitment and retention. With this in mind one of the biggest changes facing organisations adopting and changing to new technologies comes from consumers, stakeholders and investors who want to know what organisations are doing around environmental, social and governance issues.
Innovation & risk
To help tackle some of the biggest issues facing society, companies can’t simply adopt technology; they need to innovate and adapt. According to a recent study by EY, in the finance sector alone 74% of organisations have already seen acceleration from traditional financial reporting to enhanced corporate reporting models that include ESG reporting. The solution to tackling ESG lies predominantly in technology, according to Peter Hirsch, Head of Sustainability at urban sustainability fund ‘2150’: “Businesses are leveraging tech to deliver on ESG outcomes, and we’ll only see this space continue to grow over the next few years”.
The availability and opportunity for innovation that new technology brings to combat ESG issues is phenomenal but there is also risk. Risk from changing business practices, maintaining the correct skill sets within an organisation and infrastructure changes to the way businesses operate and communicate (both internally and externally).
Using technology to keep on track
Technology is a key driver for economic growth and that, combined with the growing importance of ESG issues at the forefront of investor, consumer and employee minds, means the pressures around tracking, reporting and acting on issues all across the ESG spectrum have never been more in the spotlight.
Businesses across all sectors need to be actively planning for a tech-based sustainable future and, depending on the sector, size and location of your business, this can come in many forms.
Technology as a tool to combat climate change is more prevalent than ever; from adopting new working practices in sectors like building and agriculture to everyday solutions such as using renewable energy technologies.
However, your business doesn’t have to adopt new climate combating technologies, like electric cars or smart offices, to get started with ESG. For most, the journey starts with an ESG strategy and gathering clear, informed and analytical data that can inform, shape and influence short and long-term goals.
No matter the size of your company or the sector you’re operating in, using technology to report on ESG factors is something everyone can do. Deciding which factors to focus on, which data to report on and how to report and use that data are all key considerations in building an effective ESG strategy (there’s no one-size-fits-all approach).
Innovation meets human approach
At Turnkey, we’re big believers in using technology to better business practices and performance. Our innovative technology platform, Sustainion, is designed to do just that by helping you aggregate and track all of your ESG data in one place so you can make meaningful decisions about the future. However, while we’re focused on innovation, we also believe in a personalised approach, which is why we’ll never automate or digitise our advisory team.
Our experienced team can help guide you on the ESG factors your business needs to be reporting on. There is a huge benefit to understanding and implementing a strong ESG strategy but, if you’re focusing in the wrong areas, collecting data that isn’t important to your business and/or interpreting that data incorrectly then there is a risk that you could be wasting time and money. That’s where our team can support you.
Depending on where you are in your ESG journey, we can work with you to help you engage with stakeholders, formulate new business policies or carry out a materiality assessment to understand where you are in your journey and how to get to where you need to be.
Once you know what you need to be reporting on you’ll need to report in a consistent, effective and measurable way. That’s where our platform comes in. Technology should be designed to make things easier, more productive, better for the environment and, with our busy connected lives, accessible and easy to use.
Sustainion is all of that and more. The platform can help combat your data aggregation and reporting challenges, highlighting best practices against risk and giving you greater visibility across your organisation and your entire supply chain in a truly seamless and easy to use way, enabling you to automatically collect and aggregate data from multiple sources at the click of a button. Once the data is collected it can be mapped against regulatory reporting requirements and ESG frameworks. What’s more, our reporting platform enables you to track ongoing metrics to help you monitor your data in real-time, wherever you are in the world.
The combination of technology with human input means no more overwhelming or confusing data; our technology can produce real data and our team of advisors can make a real impact, guiding you and providing you with actionable insights that are designed to improve your business, now and in the future.
Contact our team to discuss how we can help.
Environmental, Social & Governance (ESG) Tracking & Metrics – A Better Way Forward