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The challenge of collecting ESG data is only going to get bigger – not least because there’s a raft of new regulation coming down the track. It’s time to get technology on the task, say PwC’s Fiona Lehane and Kimberley Bradbury.
Businesses are under growing pressure to capture ESG data, but few have grasped just how big this challenge is set to become. New regulations, new accounting standards, new taxes and new rules, all aimed at accelerating the drive for net zero, mean collecting data manually is unlikely to be sustainable for much longer.
Given this, we believe now is the time for businesses to get the right technology solution in place – this means looking ahead and taking the opportunity to get your data right. Moving early can deliver competitive advantage. Aside from making data capture more efficient and enabling data-driven insights, the right technology solution delivers the evidence businesses need to back up ESG claims and earn the trust of customers and investors, who are increasingly asking about ESG priorities. It enables businesses to make strategic decisions and assess the impact on their net zero implementation plan. Net zero and ESG credentials are increasingly relevant to the choices people are making when it comes to choosing an employer too.
However, the effort of gathering data is distracting many businesses from the real task – to understand how well they are performing against their net zero plan and other ESG targets. When ESG data is stashed away in spreadsheets across the organisation, no-one has a clear picture of ESG performance or the evidence they need to talk about it with confidence.
In the asset management industry, being able to back up claims with data is particularly important. Research shows that over one-third of investors believe a lack of data is a challenge to investing in or considering ESG products. And they might have a point. Regulators are cracking down on ‘greenwashing’ amid concern that some firms are misrepresenting the assets in their investment portfolios.
A project we’ve been leading shows forward-thinking businesses are coming to the same conclusion. One of these is Foresight Group, a sustainability-led alternative assets and SME investment management group. With £12.2 billion assets under management, the less the business generates, there is an increase in measurement of metrics across their assets in areas such as carbon consumption, emissions and diversity. Foresight decided to implement Salesforce Net Zero Cloud to collect, store and analyse its data – and we’ve been part of the team making that happen.
Many of the challenges Foresight faced will be familiar. Legacy spreadsheet systems used to collect data were troubled by manual errors and time constraints. Data was siloed in different spreadsheets, making it hard to pull together and analyse. It was also hard to track changes without an audit trail. More time was spent on data collation than generating insight. With ambitious plans for growth and the ever-increasing demand for more ESG reporting, Foresight concluded it was time to have a technology platform to support their business, increasing their analytical capabilities as well as providing them with scale and flexibility in how they report on their sustainable investments.
The result was the first-ever implementation of Salesforce Net Zero Cloud in the EMEA region. The solution, implemented as part of a wider digital transformation, is already making an impact. Foresight now has a single source of ESG data, so users across the business all have access to the same, up-to-date information. The solution allows portfolio companies in which Foresight holds a stake to track and analyse their carbon footprint across their entire value chain as well as tracking data beyond ESG matters.
Foresight can now track ESG performance of its investment portfolio. It can look at carbon scenario planning and make informed investment decisions. It tracks ESG performance by investment strategy, performs peer analysis and can assess the root cause of under- and over-performance, driving the profitability of the business and generating returns for their clients. It can attract new clients with the quality of their ESG reporting. It will be able to do this faster and with a clear audit trail. The implementation has been so successful that the project was named the Sustainability Project of the Year at the Digital DNA Awards 2023 in Northern Ireland.
The challenge of collecting ESG data is only going to get bigger. There’s an opportunity now for businesses to get the right technology in place while data demands are just about manageable. It will enable businesses to concentrate on their performance and not get overwhelmed by data collation. We’ve seen the difference Salesforce Net Zero Cloud is making at Foresight and expect to see many other businesses following suit.
“We are delighted to be partnering with Salesforce and PwC on the delivery of the Net Zero Cloud platform. Net Zero Cloud will enhance Foresight’s ability at a corporate level to engage with our sustainability data for continuous improvement. This solution will also enable SMEs to effectively measure their environmental impact and take a proactive approach to addressing their emissions. Net Zero Cloud aligns perfectly with our ambition to continue leading the way in delivering solutions at the cutting edge of responsible stewardship.”
Lily Billings, Head of Sustainability at Foresight
