Indispensable ESG

Innovation Indispensable ESG Evan Ramzipoor Brand Contributor ServiceNow BRANDVOICE Storytelling and expertise from marketers | Paid Program Jun 23, 2022, 03:24pm EDT | Share to Facebook Share to Twitter Share to Linkedin New research shows that environmental, social, and governance issues top corporate agendas in every sector. Earlier this month the S&P 500 ESG Index , which highlights businesses working to address environmental, social, and governance issues, made some high-profile additions and subtractions to its list. The index added Twitter, Modern, and Expedia, and removed several heavy hitters, including Tesla, Home Depot, Chevron, and Under Armor.

Elon Musk was not amused . Research clearly shows the rising call for ESG throughout industries. getty Regardless of Mr.

Musk’s anti-ESG meltdown, the attention paid to these adjustments signal growing interest in ESG from shareholders and the general public. People genuinely care about ESG. But what do ESG issues look like when translated into executive to-do lists? To answer these questions, ServiceNow and ThoughtLab surveyed 1,000 executives worldwide across five sectors: manufacturing, telecom, healthcare, financial services, and the public sector.

The good news: every sector is making progress toward achieving their ESG goals. But there’s tremendous variation in how they’re going about it—and what they’re missing. Under pressure Organizations across all sectors know they’re facing tremendous pressure to make measurable progress on ESG.

Survey respondents reported an average “medium to high pressure” to set and meet ESG benchmarks. While analysts have traditionally framed ESG as a public opinion issue, most respondents reported otherwise—that employees and shareholders, not the general public, are pressuring them to make progress on ESG fitness. Most organizations are dealing with that pressure by focusing on the “E” part of ESG: environmental sustainability.

Net-zero carbon emissions and renewable energy sources are top of mind for most executives, especially those at companies in the earliest stages of crafting an ESG strategy. Survey respondents who said they’re just starting to think about ESG are using green energy sources as a jumping-off point. [Dig deeper into the data.

Read the full report here . ] While sustainability often comes up as a key goal, the pressure to address social issues is rising too. Perhaps unsurprisingly in the context of the Great Resignation, over half say they’re trying to build a happier, more equitable workforce.

That means subsidizing employee education, providing opportunities for upskilling and training, and paying closer attention to workplace conditions. Surprising leaders To score survey respondents on their ESG maturity, companies were evaluated across eleven dimensions: whether they’ve developed an ESG vision, strategy, and budget; communicated this strategy to stakeholders including employees and investors; developed metrics to track their progress, and harnessed digital technology to support ESG efforts . Interestingly, manufacturing came out ahead of other sectors —for a variety of reasons.

One is that manufacturers came under early fire for their contributions to climate change (and not without reason; much of the global risk to the environment starts on factory floors and in supply chains). Another factor: Because manufacturing firms tend to be large, they have the resources to make rapid, substantial progress on ESG goals. Data is everything when you’re deciding on a timeline for hitting net-zero carbon emissions, or increasing diversity and inclusiveness in the workplace.

Over the past 20 years, global manufacturers have become increasingly rigorous in their data-collection processes and methods. And data is everything when you’re deciding on a timeline for hitting net-zero carbon emissions, or increasing diversity and inclusiveness in the workplace. The more a company can measure, the better they can understand their progress—and where to go next.

The lowest maturity scores came from telecoms and, especially, the public sector. In an awkward but predictable “do as we say, not as we do” situation, government agencies and other public sector entities are large, oftentimes slow moving, and in some cases hampered by inefficient data collection or poorly defined reporting standards. Of all sectors surveyed, the public sector is facing the most pressure from communities to make progress on ESG.

Executives are optimistic Another unexpected commonality among executives? Optimism. On the whole, C-levels say they’re confident their organizations have the tools they need to make substantial progress on ESG. Most businesses are investing in headline-grabbing technologies like internet of things (IoT) devices and artificial intelligence to gather data, track progress, and automate core processes.

Because of these new investments, representatives from every vertical also said they’re investing in data privacy. C-levels understand they need a skilled workforce to operate all these new tools. There’s a feedback loop at work here: Business leaders need skilled, talented people if they want to meet ESG goals—but they also believe meeting these goals is crucial for attracting top talent.

They’re probably right. Employees consistently report that they’d rather work for companies that are making a difference. Given the time and energy organizations are spending on ESG, that optimism doesn’t seem misplaced.

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