The world of (big s) Sustainability remains in flux, being continually reshaped, rekindled and reimagined. It is almost impossible to remain up to speed with the ongoing political, legislative, economic, geopolitical, national, supranational, judicial, social, cultural, socio-cultural, and anthropological policy environments. We could go on, but, you get the point: it is simply far too much information.
Beyond the sheer breadth and depth of data, there are further questions on what, exactly, this information looks like. What kinds of data are we talking about, and how do we represent, analyse and use this data-and critically, how do we keep data relevant, making sure we are not overburdening decision-makers with a glut of often jargonistic, esoteric, or non-relevant information.
Part of the answer lies in the burgeoning sector of sustainability data management services that aim to streamline the acquisition and analysis of data, improving its usefulness, reliability and relevance, whilst also aiming to reduce time burdens and boost productivity for sustainability professionals.
Though the accurate and timely use of data is an absolute must when it comes to making informed decisions, sustainability professionals tend to wear many hats and dealing with data is just one of them. Freeing up time through increased efficiency would allow them to focus on other aspects of their work such as advocacy, influencing, and consensus building. Such activities are sorely needed when it comes to creating holistic and robust strategies across and embedded within firms, especially when these kinds of strategies drive measurable value creation.
Part of the data problem is in understanding what is material to your firm's’ activities. Though frameworks can help, materiality analysis' should always be undertaken in a contextually driven way. After all, only you know the confines of your company’s exposure and impact. The point here is that ESG considerations do impact financial materiality, and accounting for them on a case-by-case basis allows for a robust strategic outlook.
Moreover, ESG pressures are not just political, your activities may contribute to negatively impacting your medium or long-term horizons. Imagine that you are investing in climate sensitive assets such as timber, in this case understanding how climate change impacts your investments isn't just ''going green'', it's evaluating material risks to your long-term returns. Taking positive and proactive steps now can increase resilience and foster sustainable long-term success. We see this as a win-win for both you and the environment.
So what to do with all of that data?
Ask yourself what is important to your firm and how ESG data might help it meet its goals.
Leverage the latest technology to cut down on time, cost and endless frustrations. The advent of genuinely useful AI is a huge opportunity to innovate.
Understand the story that your data is trying to tell you. What is the signal in the noise? A system such as Dasseti’s helps guide decision-making by providing benchmark analysis and offering suggestions as part of data analysis. Utilising such tools means that you have tangible takeaways and actionable advice.
Once you've identified the kind of value you wish to create, analyse the data through your lens and pay attention to what it tells you. ESG data can open new ways of seeing and novel pathways to value creation.
There is a key difference between responding to regulatory pressures and seeing the transition to a net-zero economy as an opportunity to create value. Let us be specific here with an illustrative example: for PE firms undertaking acquisitions, utilising ESG data to acutely understand operational inefficiencies-think inefficient use of energy-can help recapture lost value across supply networks, but it may also identify new revenue streams for portfolio companies such as entrance to new markets or the creation of new ESG focused products.
There are two sides to this coin. The first is that by using a sustainability outlook we can identify where value is being lost, and the other is in identifying where we can create value. To reiterate our earlier point: this is win-win.