There isn’t a one-stop-shop solution for ESG, but good data’s still good data.
The perils of acronymization
Nowhere are the perils of acronymization more apparent than with ESG (Environmental, Social and Governance). Distilling a new way of doing business into three letters has had the minimising effect of making it seem like a single solution is possible.
Unfortunately, a business’s Environmental, Social, and Governance performance is far more difficult to measure and improve than these three simple letters imply. The good news is that businesses scouring the market for a platform to improve their ESG performance are guilty of nothing more than asking the wrong questions.
It’s often a matter of terminology. They aren’t always looking for an ESG solution; they might be after a carbon accounting solution or a tool to engage their supply suppliers in order to make progress with supply chain decarbonisation. ESG casts such a wide net that it would be impossible for a single platform to cover everything.
Sure, it’d be nice to have a solution that monitors deforestation in the supply chain while managing labour risks in supplier factories and ensuring that hiring practices within the company aren’t discriminatory. However, if it was capable of doing all of that, we would have to question whether it’s doing any of those well.
This is the fundamental issue with ESG: it’s one acronym that covers many things across the spectrum of corporate social responsibility. To ensure they can meet reporting standards and track their climate objectives over time, companies need good data on labour indicators, emissions, biodiversity, water, pollution, and other social and environmental factors.
With the rise of environmental regulations and customer demands for supplier data, gathering emissions data and making it auditable is never going to be a waste of time. That’s where platforms that specialise in actionable and auditable impact data step in.
Creating impact with actionable data
The surge in ESG regulations means businesses need data more than ever on the previously unknown territory of their supply chains. Between regulations such as the CBAM, CSRD, and SECR, businesses could find themselves drowning in an ocean of data points.
Compliance with these regulations is going to take a lot of work from businesses, whether they’re industry leaders or late adopters, but it’s not as tough as it looks. Most non-financial reporting frameworks have a particular structure in common: identify, assess, mitigate, prevent risks, and then report on how you’ve done it.
The guidance included with the EU’s Corporate Sustainability Reporting Directive encapsulates just about everything ESG covers, giving a good idea of the need to collect holistic data on a company’s social and environmental performance. The good news? Businesses don’t have to comply with all of them yet. However, section ESRS-E1 focusing on climate change is mandatory.
At some levels, such as for ESRS-1, platforms will generally start to crystallise around one specific area of ESG. That is where companies will require auditable and actionable data on their climate impact.
Scope 3: From mystery to measurability
Many businesses are still far from the “take action, mitigate, and prevent” stage. They’re still busy measuring and analysing emissions. But how do they know they’re doing a good job?
Good data is the answer, but it can be hard to come by, especially when regulations specify measurable scope 3 emissions mitigation that necessitates supplier engagement. Where do you get data on your supply chain from? Who do you talk to? How can you trust it? Even when you have it, what do you do with it?
Thankfully, there are platforms out there that can measure and manage scope 3, turning the threat of regulatory non-compliance into business opportunities and competitive advantages. Emitwise’s speciality is dispelling the mystery around scope 3, making emissions data accurate, auditable, and actionable.
Platforms like Emitwise are helping businesses take the first steps towards improving their environmental performance and get them on the right track to improve their wider sustainability performance.
The important thing to remember is that businesses won’t find all of the solutions in one place, but they’ll have to start somewhere, and gathering data on scope 3 is an excellent starting point.
Turning emissions data into climate action
Your emissions data won’t exist in a vacuum. Emissions are a touchstone for other ESG indicators such as deforestation, pollution and biodiversity loss. With product-level emissions data, businesses can start taking action to mitigate emissions in their supply chain and back their emissions reduction plans with accurate data and granular calculation methodologies.
Emitwise’s platform is accessible and designed so that sustainability professionals and executives from all departments can visualise the data and act on it. With the rising demands of ESG regulations, data accuracy is driving the sector forward, and guesses aren’t going to cut it anymore. That’s why Emitwise focuses on data accuracy and is committed to auditable and financial-grade carbon accounting.
It’s disingenuous to offer a one-stop-shop solution for ESG, but that doesn’t mean there aren’t platforms out there that can satisfy regulatory needs and safeguard competitiveness.
Avoid the perils of acronymization, manage your emissions and trust us, the rest will fall into place.
