If you want your company to make a genuine positive environmental impact, it’s time to get a better handle on your data. Let’s find out more.
In the last ten years, organisations have begun to realise that, rather than just disclosing their carbon footprint as part of their ESG (Environmental, Social and Governance) reports, they can add value to their operations by decarbonising.
It’s a challenge, often because companies simply don’t have the pooled data to extract the right insights. Decarbonisation and data silos don’t work well together. In this article, we’ll look at how organisations can shift their focus on data and bring their decarbonisation efforts to life. Let’s get started.
Lip service or genuine effort
If you believe what many companies write in their messaging, they are on track to hit their sustainability goals, and all is well. The reality, however, is different.
A recent study by EY in Australia called The Enough Report questioned whether companies have done sufficient work on sustainability over the last two decades. Metrics on carbon emissions from companies have not shifted in the right direction – and company sustainability has not moved the needle on global emissions.
The Scope scale
Carbon emissions from organisations are classified into three categories, called Scopes 1, 2 and 3. Here is what they mean:
- Scope 1 – Direct emissions from company activities
- Scope 2 – Emissions from purchased energy
- Scope 3 – Emissions from the supply chain, upstream and downstream
Scope 3 is interesting because it is often the largest part of an organisation’s carbon footprint. If companies took a greater interest in their supply chain and the partners they work with, it could have a dramatic positive impact on their emissions. However, most companies focus on Scopes 1 and 2 and promote emission reductions without considering Scope 3.
Sustainability is good for business
There are massive benefits for companies when they become more sustainable. For example, companies like Volvo are developing service offerings which can add 50% to the lifetime of their products, significantly increasing a customer’s average spend. If they can make services a bigger part of what they do, they can grow their business while reducing emissions direct and indirect.
The secret to making this work? Data.
Data challenges
Data has the potential to help the transition to sustainable business practices, especially for service-based companies. However, the data companies currently hold, typically within ESG software, is only suitable for reporting purposes, not delivering the actionable insights companies need to drive change.
In addition, data tends to be siloed in different departments throughout the company, so the decision-makers cannot get the holistic view they need.
Solving data issues to drive sustainable transformation
Fortunately, forward-thinking companies who understand the business benefits are shifting away from manual sustainability data collection, Excel spreadsheets and once-a-year reporting. Instead, they’re turning to comprehensive company-wise sustainability platforms. These platforms integrate data from across the business, bringing it into one place, so decision-makers can see the big picture and make more informed choices.
There is still a way to go. High-quality sustainability data is hard to obtain, especially compared to financial data, for example. As companies become more transparent about their performance regarding sustainability, it will necessitate better data collection and drive innovation.
