Climate change is a pressing issue, addressed recently at COP26, with corporate leaders committed to achieving net zero carbon by 2030. Julie Kae, VP of Sustainability and DE&I, Executive Director of Qlik.org provides insight into how data help businesses become more eco-friendly by aiding their ESG requirements and helping them meet sustainability targets.
In the wake of COP26, both governments and private sector organisations have been under intense scrutiny to explain how they will meet the lofty sustainability targets they are expected to – and this pressure is a good thing.
Unsurprisingly, this impetus is not new, as many businesses have been trying to defend their climate change credentials in order to shake off accusations of ‘greenwashing’ and performative corporate activism. These concerns are indeed valid, as now more than ever, environmental, social and governance (ESG) considerations are playing a major role in determining the success of many firms. This includes everything from pitching potential investors, making procurement decisions and informing consumer habits. The ability to shape consumer habits is particularly powerful, as a recent study by PwC showed that 80% of consumers were more likely to buy from a company that actively stands up for the environment through their work.
Being open and transparent with your sustainability targets
To attract both customers and talent, it is increasingly imperative that businesses can prove their commitment to ESG. The answer for many lies in data – tracking a range of different metrics to demonstrate their impact on the environment and society around them. Reporting information of this kind is on the up – a recent KPMG study noted that 80% of the world’s largest organisations now provide some form of sustainability reporting, up from 13% in 1993.
For all the corporate reporting in the world, a lack of standardised metrics between businesses means that the data collected risks falling on deaf ears. If that intelligence is specific to an organisation, how much of it can make sense to the customers, employees, investors and regulators that it is aimed at? Without such standards – and the ability to understand said data – ESG metrics risk being branded as the next wave of corporate jargon. In fact, a Deloitte survey revealed that a lack of transparent information about ethical practices and values is stopping 34% of consumers from engaging with brands.
This isn’t just an external issue either. Despite increased ESG reporting, PwC also reported that 37% of business leaders highlighted a lack of standards (along with regulatory complexity) as a major barrier to ESG growth. For all the generated data available to share with key stakeholders, often even the businesses reporting it don’t know what it means or how they should be presenting it.
Investing in data literacy for the people and the planet
The latest research from Qlik showed that, despite the significant increase in the use of data in every aspect of business, just 24% of the global workforce claimed to be fully confident in their ability to read, work with, analyse and argue with data.
As the intensifying debates over the environment and social justice show, however, the need to tell a story with data has an impact beyond attracting customers, hiring staff or targeting investors. Having the ability to understand ESG data can drive decision-making with major ramifications for people and the planet. At the highest level, it is contributing to decisions that inform major goals and targets, such as the United Nations Framework Convention on Climate Change (UNFCCC). This is where global ESG data reporting standards come in – if corporate emissions targets might have been slightly nebulous, we now have the opportunity to align businesses with the global bodies driving change. And it all starts with a full understanding of the information we have available.
For example, while debate rages on the success or otherwise of COP26, one of the main focuses has been keeping the world on track to limit the rise in average temperature to 1.5 degrees. There are urgent scientific reasons why this target has been set, yet even for the largest of organisations, understanding how their activities directly relate to this target can be difficult. With a better understanding of data and the ability to see the narrative in the intelligence, companies are in a much stronger position to align their activities with global goals and crucially, make decisions that have a tangible impact.
Shifting the responsibility for climate change away from the individual
Part of the challenge is that not everyone can be a climate expert. To accurately convey ESG data, each business needs to be able to present it in a user-friendly manner. By doing so, all stakeholders can work with data to align and activate proactive efforts to operate more sustainably. For example, developing accurate scenarios and simulations transparently means that everyone in the organisation can understand key actions that need to be taken.
That’s the key – making data consumable by everyday users. It can be detailed, or even the result of complex calculations drawing on multiple different sources. But empowering employees to self-serve and use the resulting intelligence to support their roles, rather than stopping what they are doing to decipher huge volumes of information, can have a significant impact – particularly in an area that has been subject to little tracking and reporting.
The climate change question is not going to go anywhere in the near future, so it is a matter of urgency that both governments and businesses play their part and are serious about the environment that we so often take for granted. This means ditching unrealistic sustainability targets that are based on ‘gut feeling’ for something more tangible and concrete.
By putting data at the heart of eco-initiatives and sustainability targets, organisations can do just that. Having a data-first approach to tackling the climate crisis not only allows firms to understand how their business practices are impacting the environment, but also enables business leaders to identify areas for improvement and communicate this clearly to all key stakeholders involved.
By leveraging data in this way, organisations can easily grasp how they intend to enact change for the future while transforming lives along the way.