Business leader, pay attention to these 3 things in your sustainability work
In many organisations, ESG has made its way onto the desk of the CFO, HR manager or marketing director. Whoever the recipient, the work should be done wisely from the start.
ESG refers to the efforts of an organisation to take environmental, social and governance factors into account in order to make its decision-making more sustainable. Corporate social responsibility is growing and the role of business is evolving. By 2026, almost all companies will be required to report on their performance, with reporting obligations being phased in from 2024. The work is under way, and the time to start is now.
Now is the time to get started – not just to meet reporting requirements, but to make a positive impact on your business in the near future with ESG.
Why is ESG so important for business?
ESG has a broad business relevance, as it is not only an ethical choice, but also an economically sound strategy. Environmental responsibility helps companies to reduce resource consumption and improve efficiency, which, if done wisely, leads to cost savings and new business opportunities.
In terms of social responsibility, companies that invest in the well-being of their employees and fair working conditions experience higher employee engagement and productivity. Also, brand and customer relations, as well as the employer profile, are seen to be stronger.
Governance practices, such as transparency and ethical practices, build trust among stakeholders. These factors can already influence market positions – for example the value of money – not to mention risk management, which is crucial in our ever-changing environment.
ESG is no longer just a mandatory reporting matter, but a genuine and central factor in business success and sustainable growth in the future.
How are organisations prepared?
Katariina Kekkonen, who’s developed the ESG service offering at Sofigate, says that medium-sized companies in particular are preparing for ESG in very different paces. For some companies, the pressure for ESG-related development projects has come from within the company, i.e. they understand the importance of development for their own business. For others, the pressure has come from outside, from their own stakeholders, such as investors.
Some companies are still in the early stages of figuring out how and where to start. “ESG is an opportunity for every company to take a leap towards more sustainable and risk-free business,” Kekkonen sums up.
“I have noticed that companies are indeed getting started with ESG planning and targets, but continuous ESG monitoring and reporting is a challenge for many. Do you collect the required data for reporting manually from different sources into Excel, develop your own data systems, or just buy new technology to do it?” Katariina sums up the situation.
“To address this need, we at Sofigate wanted to provide organisations with a solution that minimises the reporting burden on the organisation: a turnkey solution that includes a dashboard that meets EU standards. We remove the pressure to acquire separate technology, and reduce the need for manual work and resources for data management. What is also important is that deployment is easy and the cost is reasonable for businesses. The result is an ESG Service Center,” says Kekkonen.
The ESG Service Center is a service that provides a modern data platform, integrates it with your company’s own information systems and manages and reports your ESG data. The service is built around functionality and reliability, giving companies the space to focus on what matters – bringing sustainability into their strategy and the data to support it.
You need to take at least these three things into account in your ESG work:
- Commitment
Business leaders need to make ESG objectives an integral part of the company’s strategy and culture – in future, you need to be able to show ESG as part of your strategy! You need measurable targets and continuous monitoring. Without reliable data and stakeholder involvement, we cannot monitor the objectives. - Organising ESG work in your company
ESG is a new area that needs to be organised in every organisation. It should be the company itself that drives the ESG vision and development, but it makes sense to buy the laborious and resource-intensive reporting as a service. - Continuous learning and harnessing innovation
The best way to learn and innovate is to track the data and develop actions based on the results. Without data, development happens blindfolded. Also, take advantage of innovations from other companies.
Data and its management is a red thread in ESG and therefore data management needs to be addressed from the beginning. The better you build your foundations, the less ESG work will occupy your organisation in the future. In fact, ESG cannot just be an extra job on a person’s desk if you want to get the most out of it. ESG, its development and reporting will require a dedicated role in your business.
Read more about our ESG Service Center here
About the author
Anne Kinnunen leads Sofigate’s Management and Operations business unit, which provides our mid-market clients with management and expert services for business technology adoption and business transformation programmes. Anne is passionate about development, data-driven leadership and disruptive business and is always up for a variety of sparring sessions.
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