The Perils of ESG Reporting - Lessons Learnt from Operational Excellence
When we look back at 2023 it was the year of ESG Reporting. The great thing about it is that companies started to take the topic of sustainability seriously and allocated resources to do something about it. And for any sustainability journey, understanding the baseline is important. Though, as Robin Hicks recently pointed out, companies are confused with the selection of standards, information and opinions. For example, calculating a company's carbon can take 2-4 years!
In my experience, this is frustrating and boring. Which leads to dissatisfied shareholders and employees as a lot of effort is put into something that does not generate results. With this we are fuelling resistance that costs energy and reduces productivity. That is why many well-intended sustainability journeys end and are axed.
Can we simply not do carbon accounting? No. Does it need to be this cumbersome? No. And here my experience in operational excellence is really helpful. An area where you focus on creating more value with the resource you have based on data and analysis. Let's apply this to ESG improvements as well. Here are some thoughts:
In my experience, this is frustrating and boring. Which leads to dissatisfied shareholders and employees as a lot of effort is put into something that does not generate results. With this we are fuelling resistance that costs energy and reduces productivity. That is why many well-intended sustainability journeys end and are axed.
Can we simply not do carbon accounting? No. Does it need to be this cumbersome? No. And here my experience in operational excellence is really helpful. An area where you focus on creating more value with the resource you have based on data and analysis. Let's apply this to ESG improvements as well. Here are some thoughts:
- Start your carbon accounting (and other sustainability reporting activities) in dedicated areas; first something simple to test your approach; then continue in areas that can create highest improvements.
- Translate the data intelligence into improvement action; the goal for ESG reporting is creating positive environmental and societal impact and this should guide our efforts.
- Formulate a sustainability strategy that is relevant for your industry, market and company culture; this will be the North Star to guide short-term and long-term decision making.
- Celebrate the results and achievements and let them drive the next effort.
- Embed ESG reporting into a broader transformation program that aims to enable every employee to become a climate ambassador; the goal is to drive new behaviour and mindsets and steer to a new culture.
- Reflect how your sustainability change journey can follow the values of honesty, courage, frugality, and synergy (more here).
What are in your eyes the key ingredients for a successful sustainability journey?
Reference: Eco-Business CSO Survey, Robin Hicks, Jan 2023
1 Comment
Climate change concern is still there and will always be there. However, generative AI hype is taking over most discussions as it touches on everything, including climate change.
The question now is to where the focus should be kept.
Perhaps and soon, unified approach will be demanded by most as we get tired of too many pressing concerns including energy transition, circular economy, resource issues and more.
The proposal to have a usable projection model app has been made public. We can make a good play on this if we have at least one good data scientist and one AI engineer to collaborate with.