With the rise in pressure from investors, communities, and other stakeholders for organizations to disclose their Environmental, Social, and Governance (ESG) performance, more and more businesses are publicly announcing sustainability goals and initiatives. But declarations are easier to make than acting and many of these organizations are facing significant challenges when undertaking the sometimes confusing and often overwhelming world of ESG.
Sound familiar? If so, you’re not alone! Sustainability leaders are often facing similar challenges as they start building their ESG programs and reporting initiatives. Read on for the four common barriers that organizations encounter and how to conquer them.
Siloed and Disparate Data
One of the biggest barriers organizations face when starting their ESG program is data. Most organizations have their data spread across multiple systems, facilities, and geographies which can require expensive and time-consuming cross-organization data collection and management. Capturing all this internal sustainability data and compiling it in one place is necessary for an organization to fully assess its ESG performance.
On top of this, Scope 3 and value chain data considerations can easily overwhelm even the most seasoned sustainability professionals. With this enormous hurdle, it’s no wonder why more organizations are seeking solutions to help automate and centralize ESG data collection and management.
Lack of Resources and Strategy
Another common obstacle sustainability professionals face is misaligned goals with corporate resources and strategy. This usually takes the form of big commitments without the necessary financial or human resources needed to realistically achieve these goals. Organizations starting their ESG journey need to ensure they provide resources and support that match the level of commitments they’ve made.
Organizations also need to have a comprehensive ESG strategy in place in order for resources to be directed effectively and efficiently. Without a proper roadmap, organizations will find it difficult to start their ESG program and even more difficult to achieve the goals they’ve set in a direct way.
Increasing and Ever-Evolving Regulations and Frameworks
More countries and governments are implementing new regulations and mandatory reporting standards requiring organizations to disclose their climate risks and impacts. Keeping up with this continuously changing regulatory landscape can be a challenge for any organization but especially those just starting their ESG journey who do not have the experience or resources to handle the entire alphabet soup of regulations and frameworks.
This is also especially true of international businesses and organizations operating in multiple jurisdictions where requirements can vary. Organizations can mitigate these regulatory risks by deploying a technology solution that automatically updates with the newest changes to regulations and frameworks.
Conflicting Needs of Stakeholders
As the list of regulations for mandatory reporting grows every quarter, so does the pressure from stakeholders for an organization’s response. The challenge is that each group of stakeholders has its own heightened and differing expectations of an organization’s ESG performance.
Investors and board members often care about the effects on the bottom line, while employees and community members may be concerned with how an organization is impacting their day-to-day lives. These sometimes conflicting priorities among stakeholders can make it more challenging for an organization’s sustainability team to balance differing concerns while directing resources.
How FigBytes Helps Organizations Overcome These ESG Challenges
With these and other barriers in their way, many organizations are looking for solutions that can help streamline their ESG and sustainability programs. FigBytes is a cloud-based ESG platform that helps organizations track their ESG performance, including carbon accounting and water stewardship efforts.
Implementing a solution like FigBytes helps businesses:
- Collect and manage ESG data from across an organization
- Conduct a materiality assessment and develop an ESG strategy for the effective use of resources
- Simplify reporting and automatically keep up with new regulations and frameworks
- Exceed stakeholders’ expectations with dynamic engagement tools
Are you ready to start your ESG journey? The FigBytes ESG Insight Platform helps organizations better align strategy, integrate ESG data, automate reporting, and engage stakeholders. Click here to learn more about what the FigBytes platform can do.