What is ESG?
The environmental, social, and governance (ESG) is a framework that helps investors and companies evaluate how well investments or businesses perform in terms of environmental, social, and governance aspects while considering sustainability, social responsibility, and governance practices for creating long-term value.
The example factors of ESG are listed below. ESG can differ for each organization due to contextual factors such as industry, size, location, and stakeholder expectations, which influence how they assess and address environmental, social, and governance performance. Additionally, organizations may have diverse priorities, strategies, and risk profiles, resulting in varied approaches to ESG integration and reporting.
Why is ESG Strategy Important?
In today’s business landscape, ESG considerations are more critical than ever. ESG considerations are important for companies as they help manage risks, promote long-term sustainability, engage stakeholders, drive innovation, and ensure regulatory compliance. Incorporating ESG factors into business strategies can contribute to companies’ financial performance, reputation, and resilience in a changing business and societal landscape. Companies that prioritize responsible business practices are not only contributing to a sustainable future but also gaining a competitive edge in attracting customers who prioritize sustainability.
The absence of an ESG strategy can subject businesses to risks in reputation, legality, and finance, while also depriving them of potential advantages like enhanced reputation, capital access, and increased innovation. It is vital for companies to embrace an ESG strategy to maneuver the evolving business environment, fortify their resilience, and establish sustainable long-term value.
Challenges to ESG
While ESG considerations are gaining momentum, there are challenges associated with standardization, ownership, data availability, and quality, KPI understanding and complexity, stakeholder engagement, and impact assessment. Companies and investors need to be mindful of these challenges and work towards addressing them to ensure meaningful and effective incorporation of ESG factors into corporate practices.
Transform ESG Challenge with Automation
Automation has the potential to transform how businesses approach ESG challenges by driving operational efficiencies, reducing environmental impact, promoting social equity, enhancing corporate governance, and supporting risk management efforts. However, it is crucial to ensure that automation is implemented responsibly. This is shown with careful consideration of ethical, social, and human rights implications, to ensure that the benefits of automation are realized in a sustainable and responsible manner. By leveraging automation as a tool for positive change, businesses can contribute to building a more sustainable, equitable, and responsible future for our planet and society.
ServiceNow, a leading provider of digital workflow automation solutions, is at the forefront of leveraging automation to address ESG challenges. Through its innovative platform, ServiceNow offers a range of capabilities that can contribute to solving ESG issues in a sustainable and responsible manner. With ServiceNow, organizations can seamlessly integrate ESG considerations into their enterprise systems, leveraging real-time views on metrics against ESG goals to enable more accurate decision-making. The platform’s capabilities provide a full audit trail, ensuring data provenance and reducing external audit fees. ServiceNow also automates the production of reports/disclosures, saving time for the reporting team. Additionally, it helps organizations efficiently manage exceptions to their ESG policies, identifying areas of risk that may hinder the achievement of ESG targets.
ServiceNow consistently enhances its technology stack with new integrations and capabilities in each release. Recent updates have introduced the following new ESG features:
- Enhanced ESG data collection and reporting, including carbon emissions accounting with expanded metric calculation capability
- Efficient and user-friendly data collection through a spreadsheet-style format for seamless ESG data input
- Ability to plan out and track goals, targets, and initiatives
- Automated creation of disclosure reports aligned to frameworks like GRI and SASB
- Integration with advanced Strategic Portfolio Management software for seamless program and project management.
- Integrate ESG management with workday
- Upload historical data and use ESG management as a system of record.
If you’re interested in learning more about Perficient’s ServiceNow capabilities and how ServiceNow ESG can benefit your organization, reach out!