Building an ESG data foundation
While data is critical to sustainability, it is often not available or of satisfactory quality. When the data is available, it requires the necessary cleansing, validation, enrichment and transformation before it can provide value. This is where an ESG data foundation or a data platform comes into the picture. Next, organizations need to figure out where to find the data and establish procedures for capturing the data, importing it into the platform, transforming the data and ensuring data quality. What is also needed is a carbon calculation engine that can be used to perform calculations on carbon footprint. These curated datasets can then be made available for different tools, business applications, analytics and dashboards. The ESG data foundation enables scaling and customization of your tech stack so that you can drive green action and reduce carbon emissions as part of your net-zero transformation journey.
Having a proper data foundation along with data governance also ensures that data is “assurance ready” in accordance with CSRD.
Establishing procedures to capture data
Data capture procedures require focus both at a functional and at an individual level. For example, in procurement, when you choose a supplier, how do you know that a given supplier will support you in your journey to becoming carbon neutral? This will require collecting data on suppliers’ carbon footprint with respect to various products and services.
In procurement, for instance, assessing a supplier’s commitment to carbon neutrality involves collecting data on their carbon footprint across their value chain. Similarly, data collection during project deliveries, such as tracking travel, becomes pivotal. Understanding individual contributions to an organization’s ESG goals necessitates collecting data on an individual’s carbon footprint, covering activities like commuting or the use of meeting rooms. This collective data is then integrated into the data foundation or platform, enabling the creation of various “data products” tailored to the specific needs of the organization.
Utilizing data to “nudge” carbon-efficient actions
Once a robust data platform is available, data collected from various streams either manually or through various IOT sensors needs to be made readily available, integrating it with people’s day-to-day work. The overall experience needs to be made as smooth as possible. Access to data-driven insights will enable people to make informed choices to do the right thing.
Engaging people is important, people need to know the “why”. Why should they be a part of this or why should they try to change behaviors? For example, empowering people with information can be helpful in increasing reuse or extended use of electronic equipment. The trend of replacing mobile phones every couple of years could be limited. Often people replace their phones every two years, even though they are quite happy with what they have been using. Giving people information on the carbon footprint of a new phone can be helpful in nudging them to delay replacing their phones.
Another example could be to publish the carbon footprint of various menu items in the office canteen, so people can make informed decisions on the food they consume. At the EY office in Oslo, an effort is being made to have more plant-based foods and to ensure that people do not take more food than they need. Reducing food waste is important in trying to reduce carbon footprint.