Global challenges are nothing new. Climate change, balancing economic and social needs and addressing inequality have been at the forefront of our news cycle for many years. What’s different today? More and more consumers, investors and even employees are seeking to put their money and interests to work at companies that seek to make the world a better place. Organizations need to make a positive impact on the world around them, but it can be difficult to know where to start. In today’s third edition of our 5-part ESG blog series, we will discuss how organizations can evaluate and improve their socioeconomic efforts using ESG. We will focus on the social technology vendors that organizations must have in place in addition to the public ESG data providers to enable a transparent, accurate ESG program.
What is ESG?
ESG stands for Environmental, Social, and Governance. These three factors consider the impact an organization has on itself, its customers and the community. In today’s climate, pun intended, adopting ESG measures is important for businesses of all sizes when considering future growth and profitability.
The complexity of the ESG market is apparent when one begins to uncover the number of vendors, system functions, and services required in each pillar. This is further complicated by the variety of reporting formats that are used. Goby does a nice job highlighting the different data providers for ESG in their data providers briefing.
The social technology landscape has some large established vendors and, like environmental, is rather robust in functionality. The vendors in this space are typically segmented into three categories:
Enterprise Resource Planning (ERP)
Environmental Health & Safety (EHS)
Data Enrichment Providers
Many are familiar with the large ERP providers like Workday, IBM, Oracle, and SAP that track broad organization data such as financials, employees and suppliers. EHS vendors track occupation health, risk, incidents, and audits. The data enrichments groups are focused on supplementing ERP/EHS data to perform supplier diversity, work diversity and economic impact reporting. Many organizations operate multiple ERP’s and EHS systems that can limit enterprise visibility for executives. Large organizations must begin to consolidate, standardize and classify data across many business units, countries and languages to understand their true baselines and social impact.
Key Systems Functionality & Services
Enterprise Resource Planning (ERP)
Inventory Management
Financial Management
HR Management
Reporting/Analytics
Warehouse Management
Client Relationship Management
Environmental Health & Safety (EHS)
Occupational Health Management
Risk Management
Document Management
Incident Management
Audit Management
Data Enrichment Providers
Diverse Supplier Classification
Diversity Spend Categorization
Economic Impact Reporting
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