Automate ESG Data Collection to Drive Competitive Advantage

In a world with growing international conflict, inflation, high interest rates, and environmental pressures, managers are faced with a constant balancing act of priorities. They are constantly being tasked to identify effective and efficient means to manage risks while innovating to achieve a competitive advantage.

ESG can be a double-edged sword in this regard. On the one hand it comes with its own set of stressors and potential business threats. Increasing local and international regulations, growing customer demands, and the ever-present threat of earning a bad reputation should you get it wrong are all causes for concern.

On the other hand, getting ESG right has significant upsides. Meeting stated demands and requirements can unlock capital via financial investment or help secure loans and insurance policies at better rates. Clearly demonstrating responsible stewardship and sustainability practices may also improve your business’s reputation and attract attention from ethically inclined customers.

In the past, sustainability initiatives helped a business differentiate by adding reputational or social capital to the firm’s bottom line. Not to say it was particularly easy in years past, but the field has gotten more competitive to differentiate based on sustainability practices alone. Firms that disclose what they are doing authentically (not overstating or greenwashing) can still capture a competitive advantage though it takes more resources to rise above and may be more fleeting than previously.  

Key stakeholders (investors, employees, suppliers, and communities) are dissecting every detail—from where and how you produce goods to your hiring practices to your overall environmental impact. In this context, the value of automated data collection, sustainability focused or not, cannot be overstated. 

With this in mind, here are five key ways automating ESG data collection with technology can help you stay ahead of the curve and drive competitive advantage in a fluid sustainability landscape: 

• Improved efficiency and accuracy: The first benefits are obviously efficiency and accuracy gains from reduced manual entry. Automated data collection programs are always working  to transit information to its end point without typos or formula errors. 
• Enhanced visibility and gap analysis: Better processes facilitate better visibility. This enables a stronger sense of material topics and uncover data gaps (always keep in mind your intended audience when assessing data). 
• More effective strategizing: Less time and resources spent on data collection means more time for strategy. Better visibility into your data allows you to make thoughtful pivots based on opportunities and risks. 
• Bridged compliance gap: It’s hard for even the most versed in ESG-related regulations to keep track of updates and how your business is exposed. Technology that manages regulatory and framework-related content will ease the burden of needing to stay current on every detail. 
• Streamlined and enhanced supply chain reporting: Managing your own data is one thing, but you have significantly less control of external parties. Building repeatable processes, or automated reports, to get reliable data from partners helps identify risks early, assess your Scope 3 emissions, and ultimately gain the most co-benefits from ESG initiatives. 

The most effective managers intuitively understand that businesses need strong foundations to thrive in the long-term. Purpose-built technology that automates ESG and sustainability data collection can be leveraged to navigate growing risks in a muddied landscape and save you and your stakeholders time and money.

Learn how IsoMetrix Lumina’s versatile data collection and automation can help your business turn ESG demands into a competitive advantage.