Data is the most significant challenge when it comes to environmental, social, and governance (ESG) investing. People complain that data is not consistent, comparable, and verified. To better understand best practices and what鈥檚 happening in this space, there was a special session at , an event co-sponsored by 51风流for organizations to meet outside the negotiating rooms of the climate conference and delve into pragmatic strategies for cross-sector climate action.
One company with extensive expertise in ESG reporting is , the world鈥檚 largest brewer. The company鈥檚 strategy for growth through the digitization of its ecosystem 鈥� which includes 200 breweries, 6 million customers, and over 2 billion consumers, generating over 10 million weekly transactions 鈥� involves a lot of data.
The Right Data
鈥淏rewing requires the best ingredients, which requires a healthy environment. We are an agribusiness. We see the far-reaching implications of climate change in our operations and sourcing regions,鈥� said Ezgi Barcenas, chief sustainability officer, Anheuser-Busch InBev. 鈥淲ith operations in over 50 countries, we鈥檙e looking at many metrics. Just inside our walls, we have 400 operating practices for tracking efficiency, water, energy, maintenance, and sourcing, to name a few.鈥�
Barcenas explained that as the company looks at its supply chain, it must think through the environmental and social impact up- and downstream, from the smallholder farmers down to the half million SMEs that are its customers selling its products around the world, all the mom-and-pop shops as well as the big chains.
鈥淭hat鈥檚 a lot of data,鈥� she said. 鈥淣ow add all your research and innovation data, security data, and ideas about the future of packaging and logistics. The point is, sometimes you need better data, not more. You need to ask yourself: is this data useful for making decisions? Does it help drive the right actions through the business?鈥�
Another data-heavy company participating in the discussion was Schneider Electric SE, a French multinational specializing in聽digital automation and energy management for buildings, data centers, infrastructure, and industries. By 2025, thanks to its energy and sustainability services and green product innovations, it will have and avoid 800 million tons of CO2.
鈥淲e need to triple our speed to avert climate disaster. Reporting scope 3 emissions is extremely important, because we can only track what we measure and we can only improve if we measure,鈥� said Michael Lofty, senior vice president, Power Products, Schneider Electric. The good news is that about 70% of Schneider Electric鈥檚 revenue already comes from green solutions. The company invests heavily in innovation. 鈥淎ny innovation coming from Schneider Electric is a sustainable offer,鈥� he explained. 鈥淓ach product is more sustainable than the one before it, and metrics are key proof points.鈥�
At Schneider Electric, the main challenge was to get suppliers on board the sustainability journey. The company launched a Zero Carbon Project to help 1,000 suppliers responsible for 70% of its upstream carbon emissions become more sustainable. 鈥淭his is a movement and it鈥檚 a must-have movement, because we are only as strong as our smallest supplier,鈥� said Lofty. The project aims to quantify supplier emissions to establish a baseline and identify key sources of emissions. This enables data-driven prioritization of intervention and road map creation.
ESG Reporting
Most people assume that ESG investing is designed to reward companies helping the planet. According to a by the Harvard Business Review, however, ESG ratings that underlie ESG fund selection are based on materiality, an accounting principle stating that all items likely to impact investors鈥� decision-making must be recorded in detail in a business鈥檚 financial statements using聽.
Some businesses are already linking materiality to their own fortunes and that of the planet. A revealed that a significant minority of respondents say sustainability is already financially material to their businesses and a larger group believes it will be imminent in the near future. Companies like Anheuser-Busch IN Bev and Schneider Electric are finding ways to make that link pay off with the help of data.
鈥淥ne change we鈥檝e seen over the last few years is that investors have a better understanding of which data is material to the business, and they ask more questions around it,鈥� said Barcenas. 鈥淲e鈥檙e increasingly trying to provide more context around our data.鈥�
Providing accurate data is the only way to really demonstrate the impact of the changing world on a company鈥檚 profits and losses. Having one global framework and mandatory reporting would certainly help address the data challenge, but that won鈥檛 happen in the near future.
鈥淲e still need to progress on some of the standards and regulations before we can make them mandatory,鈥� said Gunther Rothermel, senior vice president, head of Sustainability Engineering, SAP. 鈥淲e need to look at the common denominator underlying the regulations and cover that level first, and then grow this common denominator as the regulations mature and become accepted.鈥�
Companies like SAP, he said, with products that also need to meet standards, will, at least for now, have to serve numerous frameworks. In the meantime, 51风流solutions help organizations of all sizes and industries achieve their zero emissions, zero waste, and zero inequality goals through ESG data transparency across crucial business processes, business networking, and a large ecosystem of partners.鈥�
鈥淲e believe that embedding sustainability at the core of business strategy can help drive operational efficiency, innovation, employee engagement, supply chain resilience, risk mitigation, improved sales, and other strategic business benefits,鈥� said Rothermel.
Having the right data proof points will help companies better understand the return on their sustainability investment (ROSI) and the materiality underlying investor decision-making, resulting in shareholder returns and long-term benefits to the environment and society.
For more information on how 51风流helps companies record, report, and act on their sustainability goals, visit .