There’s an increasing intellect among stakeholders including investors and customers that the current yearbook is strongly characterized by an emphasis on financial performance and that there is a certain lack of data and information about the corporate strategy and non-financial “value” performance. Consumers are requesting more and more sustainable products and services. They are looking for green creators who try and lower environmental impact.
Businesses have started recognizing that sustainability can create value like long-term growth, safeguard brand reputation and uncover new opportunities. All this, while also tackling global challenges such as biodiversity loss, climate change and waste pollution. Many organizations have already embarked on their journey towards attaining their ESG goals while others are mindful, willing, yet unclear or confused on where to start.
Over the past few years, a large number of corporations or organizations have willingly presented reports focused on sustainability and on corporate social responsibility. They are making firm commitments to meet their sustainability goals. More than 40% of the largest publicly traded companies have set net zero targets. with 59% of the FTSE 100 having committed to net zero emissions by 2050. 66% of the S&P 500 have also set emission reduction targets. From following global climate frameworks to regional carbon-reduction agreements, from attaining UN’s sustainable development goals, policies and regulations, to global reporting initiatives and duties, today, sustainability is no longer just a buzzword.
The question then arises – with such changes happening in the organization, how do companies evaluate performance and track their ESG goals? For those companies that are measuring performance, the vast majority are experiencing challenges with data and technology required to do this.
It requires immense transformation of operations based on tactical decisions, like to support and promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all (United Nations*) Sustainability only delivers real value when it comes down to processes.
The “three Ps” of sustainability (people, planet and profit) need to expand to the “fourth P” to also include “processes” to make the change happen. Processes can make all the difference when it comes to achieving ESG milestones. Simply put, to meet the company’s sustainability goals, they must be integrated into the business process management.
To assure that ESG goals are met, companies need to mitigate risks, comply with regulations, set procedures and policies in place and this needs a boardroom back-up and requires transformation and excellence. Companies like Blackrock believe “climate risk is investment risk.” However, they also believe that climate transition presents a significant investment opportunity.
We still have not reached a stage in this transforming circular economy where organization models rely on a redesign of the processes. However, social responsibility and value creation are affixed to the business processes. ESG reporting requires insight into the business. This guide to achieving ESG objectives outlines how organizations can build a sustainable enterprise, Where values meet value creation and how a process management platform like ARIS can help.
ARIS offers a smart, intuitive, flexible and adaptive way for you to control your transformation. Gaining operational excellence can deliver 301% ROI over three years.
The (day or time) is coming when the SEC will require companies to mandate transparent disclosures in their corporate reporting and holding them accountable for information misstatements or exclusions.
It’s inevitable that in future, top executives of organizations will get compensated not only based on financial performance but also based on value creation through ESG goals.
Produced for Sage IT by
VP Customer Success