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How EY can help
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EY sustainability and ESG strategy teams can help you create long-term value through strategy, M&A, capital allocation, ESG due diligence and portfolio optimization.
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There is a wide range of technologies that can be tapped for the ESG journey, but which ones should one start with? And how will you know if you are on the right path? And most importantly, how do we measure the value proposition and impact of embedding the Environmental, Social and Governance (ESG) framework within a company's strategy and governance processes?
The last question, in fact, should be the starting point while embarking on any new ESG initiative. As the doyen of management gurus, the late Peter Drucker fondly said, “You can only improve what you can measure. And proper measurement can provide the answers to subsequent questions and offer the insights needed to take the correct decisions.” Most importantly, it will also bridge the most important issues for any corporation’s leadership team – how to connect capital allocated and financial returns with ESG initiatives.
For corporations, plenty of technology tools and solutions are available to help in their ESG journey. But before the tools are utilized, organizations need to be clear about the goals they are aiming for. To design proper measurement systems, CFOs, CSOs and other senior C-Suite stakeholders should be viewing sustainability as a business imperative, to protect and create value, now more than ever before. They need to focus on some important issues:
- How did we perform financial materiality analysis to map and customize the relevant ESG themes for our industry/sector, business model, key stakeholders, and operating environment?
- Have we accurately performed data-led benchmarking study to analyze our current state and quick wins as mapped to our global industry peers?
- How can our organization bring the same degree of rigor and confidence around financial reporting to the information provided on non-financial factors?
- How prepared are we to engage with standard setters and respond to ESG taxonomies as they evolve?