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ENVIRONMENTAL, SOCIAL & GOVERNANCE


HITTING THE ACCELERATOR ON ESG DATA


Ian Kingstone, Director of Business Transformation Advisory Practice (Strategy & Growth) at Columbus UK, explains how easy it is for manufacturers to use ESG data accelerators to fast-forward their ESG reporting


strategies to unlock new business growth opportunities


E


ffective ESG reporting is rapidly becoming a key influencer in business performance management strategies as manufacturers realise its impact on the bottom line and value creation for stakeholders. Sixty percent of UK businesses are already setting long-term ESG targets. A recent survey highlighted the importance global business investors place on ESG performance, as over 80% of C-suite executives and investment professionals would be willing to pay around 10% more to invest in a company with a positive ESG record compared to a negative record. This is being reflected amongst UK based companies with 40% of respondents in a recent survey stating they have established dedicated ESG departments compared to only 24% in North America.


But without the right expertise and IT software, manufacturers are just not able to gather the required ESG data to streamline operations, increase sales, and accelerate profitability. Effective ESG reporting will allow manufacturers to unlock a wealth of business opportunities, including collaboration, attracting, and retaining a skilled workforce, and also meet the increasing customer demands for corporate sustainability commitments.


ESG reporting 101 – it must be up to today’s challenges


So, what exactly is ESG reporting? It’s the gathering and disclosing of data on a manufacturer’s environmental, social, and governance activity. This data disclosure can be key to gaining the trust of key stakeholders


40 JUNE 2024 | PROCESS & CONTROL


such as consumers, suppliers, financial associates, and the government to help them understand a manufacturer’s commitment to ESG projects and goals.


But corporate compliance and risk management are also at the forefront of many manufacturing organisations as the industry becomes more complex and geopolitical volatility increases. So ESG reporting must be a flexible tool for manufacturers to enable them to overcome sustainability challenges and all the while, demonstrate their sustainability values and objectives.


For this data to appeal to stakeholders, manufacturers need to set out clear ESG strategies, which will get the buy-in and commitment of everyone in the business – from the top managers to those on the factory floor. ESG strategies need to be clearly set out and explain how they can be achieved in order to help the wider organisation understand the key drivers, opportunities, and risks of becoming more sustainable. Fragmented data needs advanced data collection tools to bypass complexities One of the biggest challenges that over 70% of companies reportedly face with their sustainability data is data fragmentation and a lack of comprehensive data when it comes to environmental and social impacts. This is where advanced data collection systems can help manufacturers collect, analyse, and visualise their ESG data to make it easier for interpretations to be made.


As regulations are not yet in place, many manufacturers will need to start tracking data from different sources to meet future ESG regulations, as highlighted in a recent Deloitte report: Manufacturers “… didn’t set up their


operations to gather this information… They didn’t start projects expecting this data need, they don’t have the track record, they don’t have the systems, they don’t yet know how they will do it.” So, where does that leave ESG data tracking?


ESG data accelerators – easy to install, quick to collect


Manufacturers can look to implement autonomous technologies such as ESG data accelerators, IoT sensors, and machine learning so that internal resources are not stretched. These advanced tools allow manufacturers to gather ESG insights that measure and monitor their ESG reporting and ratings. Manufacturers can look to cooperate and share infrastructure both externally and internally in order to leverage stock data that optimises total inventory, reduces over production, and consumption – helping manufacturers to avoid unnecessary waste and cut down on carbon emissions across the entire supply chain. But how can manufacturers pinpoint the exact areas for further sustainable change? Dashboards keep the business finger on the ESG pulse


For ESG reporting to benefit manufacturers, a data dashboard is required so that all data can be visualised and interpreted by all areas of the business. This allows for strengths, weaknesses, opportunities, and threats to be identified along the manufacturing supply chain, which ensures continuous improvements and can help businesses gain a competitive edge.


Legal frameworks go green


Currently, there are very few ESG laws or regulations in the UK. At present, the Companies Act is the only regulation that


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