If your organization hasn’t started thinking about how to improve ESG reporting, it’s time to make it a C-level priority. Environmental, social and governance (ESG) issues continue to garner attention from investors and consumers alike. And with talks of more ESG-related regulations echoing from Wall Street to Washington, now is the time to make sure your company is not only ready to share ESG reports, but on the path to improving them.
As this Nasdaq article about the importance of strong ESG practices states:
“There was a time when a public stance on ESG issues was a public relations tactic. However, in today's rapidly changing business climate, attention to ESG issues is becoming critical to long-term competitive success.”
Organizations across all industries will need to continue to focus on their ESG endeavors – and proof of those efforts – to compete in today’s market. Understand why improving ESG reporting today is key to sustaining and growing your organization tomorrow:
1. Stay competitive
As the world takes a concerted effort in areas such as countering climate change, creating a more fair work environment and increasing workplace safety, every organization should be considering how it will support ESG practices. Yet they must do more than create strategies to have a meaningful impact. Improving ESG reporting provides insights that organizations will need to be proactive and strategic in meeting competitive challenges.
A study by investment management firm Blackrock found:
“Companies with strong profiles on material sustainability issues have potential to outperform those with poor profiles. In particular, we believe companies managed with a focus on sustainability should be better positioned versus their less sustainable peers to weather adverse conditions while still benefiting from positive market environments.”
The future will be focused on improving ESG issues. Enhancing how you track your ESG reporting will keep your company on the cutting edge.
2. Build trust with stakeholders
Administrators aren’t the only ones who are watching ESG ratings, which measure an organization’s exposure to long-term environmental, social and governance risks. Consumers and shareholders alike are also turning a keen eye to these metrics when deciding where to put their loyalty (and money). Having a strong ESG report will offer proof of your efforts and clearly showcase the work being done in line with these issues.
Additionally, a strong ESG report can counter negative attention, such as activist interventions. Companies that aren't transparent in their ESG efforts – no matter their intention – are vulnerable to accusations of “greenwashing,” or being misleading or falsifying ESG efforts. Having a strong, detailed and accurate ESG report is an easy shield against these threats and will help keep your organization positioned in a positive light.
3. Attract investors
Beyond those who already believe in your brand, a strong ESG reporting system can attract new investors, too. Now more than ever, sizing up a company is about more than the bottom line, and savvy investors are taking a closer look at organizations’ ethics and operations.
It’s more than just aligning on values that attracts new investors. ESG indicators show how a company will grow sustainably and perform in the future – not just next quarter, but next quarter of a century – thus highlighting the odds of long-term success.
4. Find great talent
Employees today have ample choice in where they work, and many want to sign-on with an organization that aligns with their values. With information about companies more available than ever before, a strong ESG report for your company provides a value-add for those looking for a new job. Plus, employees who believe in the work they’re supporting will be more invested in the company, and therefore stay on board longer.
5. Do more good
Improved ESG reporting offers countless benefits to grow an organization’s success – yet all of these issues stem from the need to improve the way we work to create a better future for all. Whether that means reducing the impact on climate change or pollution, supporting a more diverse and equitable work environment, or making management decisions in a more conscientious way, supporting ESG issues has a real impact. Reporting on how your organization is moving the needle is key to meeting your ESG goals and continuing making a difference along the way.
How DevonWay can support
At DevonWay, we work with organizations to break down silos and create unified reporting, including for ESG and beyond. With our ESG & Sustainability software, you can both track ESG metrics and implement performance initiatives to achieve your goals. Improve any ESG metric on a unified software platform that can also run your safety, quality, asset, and work management operations — so it doubles as your system of record for data that feeds ESG metrics and ratings.
Watch a demo of DevonWay ESG & Sustainability software to see how we can support you in reaching your ESG goals, or contact us to set up a personalized demo with one of our experts.
