ESG – Environmental, Social, and Corporate Governance (ESG) is a topic that’s fast becoming an essential part of business practices. Building pressures from not only customers but employees, investors, and governments alike, are making ESG commitments almost unavoidable for modern businesses.
Over the past few weeks, Market Dojo has carried out research amongst our users to establish how ESG is currently perceived in terms of importance, which department is typically held accountable, how data is being collected and which key challenges are being felt.
Is ESG on people’s agenda?
When we asked whether ESG is part of their company’s agenda, 100% of respondents stated ‘Yes’. Given the recent surge in conversations and in turn, business focus on ESG activities and data tracking, it’s not surprising that 100% of the individuals surveyed stated that ESG was on their company’s agenda in some way.
The importance and prioritisation of ESG
When asked, how would you rate your company’s view on the importance of ESG, 69% stated it was very important and 31% stated it was important. Similarly, when asked how would you rate your company’s prioritisation of ESG, 13% stated ‘medium priority’, 31% stated ‘high priority’ and 56% stated ‘very high priority’.
The responses to these questions were very much as expected, with participants’ indicating that ESG was considered to sit at the ‘important’ and ‘high priority’ end of the scales.
Whose responsibility is ESG?
The answers to this question came in many different forms. In order to reduce the number of unique departments, we’ve bundled together similar responses (eg. sustainability team, sustainability department and sustainable development department), giving them a more generic department name. We have provided the shortened list below. The most common answers for this question were a dedicated sustainability team, followed by the procurement department.
What are people looking to achieve with ESG?
When asked about their ESG goals, the respondents gave a range of responses, though numerous key themes arose from the findings. We’ve combined similar responses to give an overarching view of the typical goals businesses are working towards which are listed below.
These responses were very much aligned with our expectations and echo the conversations we’ve had with both clients and prospects when it comes to their ESG ambitions.
Where are businesses on their ESG journey and how are they collecting/storing data?
In terms of which stages respondents are at in their ESG journey, interestingly the answers were very split with 56% stating they were between ‘planning’ and ‘early stages’, whilst 44% stated they were between ‘well on their way’ and ‘well established’. Therefore the responses to this question are marginally weighted towards the earlier stages of the ESG journey, which is as we would have predicted. It was however surprising to us that so many respondents felt they were running successfully, it’d certainly be interesting to see what these processes look like and where any gaps might be.
A surprising result in this answer set when questions how ESG data was being collected and stored, with 53% using emails & spreadsheets, 27% using data collection tools, and 13% still printing and filing. Considering the high number of respondents who felt they were running their ESG activities successfully, we found this interesting. That is not to say that it is impossible to carry out these activities to a good standard using emails and spreadsheets, however, it requires a very high level of attention and rigorous processes in order to work effectively. With tools available on the market that can provide a central repository for important documents, and compliance certificates with expiry reminders for documents that need renewing, it further highlights the risks that are present when using spreadsheets.
As with some of the previous responses, we’ve collated similar answers to give a view of the typical challenges the responding businesses are facing. By far the most common challenges were around data collection and the management of information.
These challenges again are very much aligned with our expectations. The pain points our clients and prospects most often discuss with us tend to be around centralisation of data and reporting.
The importance of ESG data collection
Another qualitative answer set with numerous responses. As with previous questions of this type, we have accumulated comparable answers.
The key takeaway from the results of this survey is that ESG is certainly considered a vital aspect of running a business in the current market, with demands coming from all directions including employees, customers and investors. Many businesses are on the journey to improve their ESG data collection processes, and it’s an area taken into consideration across numerous departments, not just procurement. It’s clear from the responses that ESG isn’t going away any time soon and therefore it is an area that needs to be addressed. Though data collection and reporting of information appears to be a significant challenge.
Integrating ESG goals into your supply chain is no easy feat and depends highly on regular, robust communication between buyer and supplier, in order to acquire key data from your vendor base – gathering this information in a consistent manner and tracking it in a centralised platform, over mere emails and spreadsheets allows organisations to progress their ESG strategies, track goals, identify risks and protect their business’s reputation in what is a very fickle market.
For more information about how Market Dojo can help businesses collect their ESG data, check out the below video on SIM Dojo & ESG.
You can also register for Market Dojo’s 6 minute on-demand webinar “Integrate ESG goals into your supplier onboarding processes”.