There are an awful lot of tools out there that are being branded at least at the moment as having an ESG component. For me, it’s a little bit like digital was a few years ago. Every tool was going to enable digital transformation, and when you got to the heart of it, it was often a fairly standard traditional tool repackaged, rebranded, and we are seeing quite a lot of that in the ESG space. For me, the real challenge for many organizations here is, first, identifying the data that you’re being asked to report on.
For many organizations, it’s not information that they have historically captured. Most organizations, you just take a high-level goal that many organizations will have, which is to get to carbon neutral by a particular point in time. Some organizations are being more serious in that than others. Actually measuring your carbon footprint and capturing the carbon footprint and just even capturing the data that would enable you to start to attempt to quantify that is not straightforward, and it’s not readily available.
The reality is, organizations have got to think quite hard about what are the key components and metrics that they want, what are the measures that they want, and then to think quite hard about tools and technology. But a lot of what you actually find is, ESG tools are layers being applied, modules being applied, modules being added to very much traditional reporting tools. I’m not seeing fundamentally new things in each different area, and the challenge with ESG is, it’s such a broad topic. There’s such a large number of topics included within it, and each of those different areas may well have, and do have, tools that can help you as you navigate through it. But to say there is a single tool out there that’s specific, that is an ESG tool, that is going to solve an organization’s problem, is unrealistic.
This is much more about thinking, first of all, back to the stakeholders — about what matters to them, thinking about what we want to report and what we’d like to be able to report, and then thinking about how we will start to collate that information. And then, only at that point can you start thinking about tools and technology to help it. You can try and run, lead, with technology and get excited about the technology. It will take you down a wrong track, and the right place to start with all of this is being very clear about what you want to achieve.
The other big challenge with many organizations when it comes to this, which does impact reporting quite a lot, is, yes, it’s challenging to identify the information to report. But then it’s also often a challenge that organizations don’t like the information that comes back, or the answer that comes back.
We’ve seen this on diversity and inclusion metrics over the years. We’ve seen this on gender differentials on pay. Organizations, when they have standard metrics, don’t like the answer that comes back, and the challenge, therefore, is not specifically the reporting. It’s all the change that needs to happen, and to lead ahead of that, and organizations need to focus on that: getting to the point that they’re comfortable with the answer that’s coming back, anticipating the questions that are going to be asked and then drawing on tools where they need help with collating the information where it might not be easy to have. But there is no generic simple answer that would apply to a wide diverse set of organizations.