Environmental, social and governance (ESG) issues are demanding more board attention than ever, and it’s a topic that will continue gaining traction.
With chief information officers (CIOs) being information and data management experts, they should be an integral part of ESG efforts. CIOs can serve as trusted advisors on the quality and value of ESG data since they oversee the data flowing throughout a company.
This includes the data informing ESG strategies and the systems needed to collect, verify and calculate the information necessary for reporting. CIOs should be the ones who verify the validity of data sources, ensure data is timely rather than dated, and understand how data is secured and accessed.
In sum, CIOs can use data to drive a successful long-term ESG strategy.
Stakeholders want high-quality ESG data
The growing stakeholder focus on sustainability and diversity could very well make ESG the next digital disruptor for corporations. In fact, PwC found:
- 76% of consumers will sever their relationship with a brand that treats the environment, employees or communities in which they operate badly.
- 85% of employees want to support or work for companies caring about the same issues they care about.
- 91% of business leaders say their company has the responsibility to “walk the walk” on ESG issues.
Further, Capital Group’s ESG Global Study 2022 found the lack of consistent and sufficient ESG-related data is one of the biggest challenges they face.
Therefore, CIOs should invest in technology that pushes ESG efforts forward. They should also implement a robust reporting environment that enables the output of high-quality data, traceability and accessibility.
Know how technology can drive ESG goals
It’s critical for CIOs to recognize and understand their organization’s primary ESG goals. Is the goal to reduce the carbon footprint by 20% by 2030 or to have women and minority groups comprise half of all employees by 2027?
After gathering this information, CIOs should define which goals technology can push forward. Perhaps it’s solutions that can lower emissions, promote employee mental and physical health or improve data security and compliance.
Maintain consistent engagement with stakeholders
Because there’s such an external-looking focus on ESG, it’s important for CIOs and the rest of the C-suite to provide regular updates.
At FLEETCOR, we maintain an ongoing, proactive outreach with a wide range of stakeholders, including shareholders, ESG rating firms, debt-rating agencies, regulators and non-governmental organizations, employees, clients and partners, among others. This includes all three areas of ESG.
We have been able to build an ESG program and report on our initiatives through annual reports and by constantly looking for ways to improve data management. For example, our IT infrastructure on sustainability promotes the environmental and sustainability conversation through:
- Datacenter initiatives, which involve consolidating and streamlining our data center footprints. In fact, in the past five years, we have reduced our data center square footage by 62% and energy consumption by 152 kVA.
- Cloud computing to transform to virtual environments.
- Shared environmental commitment with vendors to leverage spend to aligned green commitments.
These steps are critical since IT’s contribution to global greenhouse emissions is between 2.1% and 3.9%.
As IT leaders, CIOs are being held responsible for ensuring technology related to sustainability is deployed aggressively, while reducing the environmental impact of existing and new infrastructure and technology. The same goes with the social and governance sides of ESG.
Play a pivotal role in ESG
The CIO should take part ownership of the company’s ESG goals – and champion them. They should prioritize those aspirations, evaluate technology through an ESG lens, measure data that matters and ensure all stakeholders are kept abreast of progress. Doing so will not only shape and improve an organization’s ESG initiatives but will help improve the brand as well.