For years, companies have talked a good game when it comes to their environmental sustainability and social betterment efforts. But conversation and non-decisive follow through is no longer enough. Customers are now demanding that their brands of choice match their rhetoric with concrete action and proof of progress.
This is the finding of a new survey from Oracle and Pamela Rucker, CIO adviser and instructor for Harvard Professional Development.
It should not shock anyone to hear about the desire for increased business activism around climate change, diversity and inclusion, pay equity, and other key ESG issues, given the social upheaval worldwide. But for me, the strength of that feeling about corporate environmental, social, and governance (ESG) efforts shown in these results is still remarkable.
For example, 93% of the 11,000 consumers and business leaders surveyed said sustainability and social justice efforts are more important than ever, and 80% said events over the past two years have caused them to change their actions in real life.
Business leaders – time to step up!
Here’s why company leaders should pay close attention: 78% of respondents—from 15 countries across the Americas, Europe, Asia, and the Middle East—said they are “frustrated and fed up” with the lack of corporate progress on ESG goals made by businesses thus far.
A still larger percentage—89%—said it is not enough for a business to say it is prioritizing ESG efforts. Consumers want definitive proof of progress and 70% said they would cut ties with companies they don’t see measuring up.
That is the stick, here is the carrot: 87% of respondents said they are willing to pay a premium for goods and services from companies that can show clear ESG progress.
Nearly all (91%) of business leaders said they face major obstacles in implementing ESG policies. Those include a lack of visibility into business partners’ ESG efforts (cited by 35%); missing data (33%); and time-intensive manual reporting processes (32%).
Technology and automation can play a much bigger role than it currently is. While a large majority (96%) of business leaders surveyed said human biases and emotional factors distract from achieving important ESG goals, many see an upside in applying technology – 93% said they think bots would be better than humans at making decisions related to sustainability and social initiatives.
You can’t manage what you can’t see
So, how can a company show its customers, shareholders—and let’s not forget regulators—that it is doing better when it comes to ESG? Well, it helps if it can tap into a unified set of data across all of its businesses and operational functions to feed into its ESG planning.
Gathering data from disparate systems is a time-consuming and error-prone process that will only get more difficult as companies see new regulations. Public companies, in particular, will likely face new SEC requirements to account for the environmental impact not only of their own operations, but also of their supply chain partners.
Companies that invest in cleaning up their ESG data and centralizing it onto a single platform will reap the rewards when it comes to analyzing and reporting on that information.
With the right technology, businesses can focus on the triple bottom line
The results are overwhelmingly clear, consumers, employees and investors are speaking up, they want to see change or they’ll walk away. It’s time for companies to prioritize the triple bottom line: people, profit and planet.
Companies that take the lead on this front—showing clear progress on these issues—will raise their standing with customers, shareholders, and regulators, ultimately improving their financial health. That, and it’s also the right thing for them to do.
To access the full report, go to ESG and AI: 61% of people believe bots will succeed where humans have failed with corporate sustainability.