A window of opportunity exists for organisations to improve their sustainability performance by leveraging the exponential advancements in technology. This way, they can eliminate prevalent ESG data management hurdles that hamper organisational decision-making and non-financial reporting.
The world is in an era where organisational performance is now being analysed and benchmarked based on results of both financial and nonfinancial disclosures – rather than merely financial metrics. Now more than ever, C-suite executives are coming to terms with the current reality that the ESG narrative has gone beyond business-as-usual.
As highlighted in our 2022 Global KPMG CEO Outlook, more CEOs now acknowledge that ESG improves financial performance. This research also revealed that CEOs anticipate that emerging technology, operational issues, regulatory concerns, environmental/climate change, and reputational risks would be the top five risks that pose the greatest threats to organisational growth in the future. Comparably, the Global Risk Report 2023 of the World Economic Forum (WEF) also revealed that environmental and social issues would likely be the most severe in the coming decade.
Consequently, it has become pertinent for organisations to have adequate control and oversight over E, S and G risks and opportunities. However, this is far from what is tenable in practice; organisations currently grapple with identifying, measuring, and aggregating ESG data. The lack of organisational expertise to integrate ESG data management and architecture into their existing business processes and data management systems has impacted the availability of quality and reliable ESG data.
A window of opportunity, therefore, exists for organisations to catalyse their sustainability performance by leveraging the exponential advancements in technology. There is also an opportunity for organisations to steer the establishment and implementation of their sustainability strategy and policies, frameworks and targets to set a solid foundation for effective ESG data management.
In this thought leadership, we would delve deeper into the current challenges that contribute to poor ESG data management, while highlighting the essential attributes of a good ESG data management system – especially as drivers of organisational planning, effective nonfinancial decision-making, and reporting. We also propose an effective blueprint for ESG data governance/management while highlighting the potential fallouts of overlooking this intrinsic business imperative.