Member Article

Becoming proud of your ESG: Closing the gap between wanting to do more and doing more

ESG is important …

Yes, we know.
Over the past decade environment, social and governance responsibility has clawed its way up the business agenda and is now something boards take very seriously indeed – not least because ESG strategies are proven to impact operating profits by as much as 60 per cent. Moreover, organisations with the highest employee satisfaction were found to have ESG scores that are 14 per cent higher than the global average. This shows that most of us want to work for businesses that are ‘doing their bit’ and acting responsibly. In fact, a study shows that 84 per cent of workers will not take a job if the business doesn’t have a strong purpose, and 83 per are more loyal to a company that helps them contribute to social and environmental issues. This results in people staying put for an average of eight months longer than they would at a company that pays lip service to ESG.

ESG also impacts consumer purchasing decisions. Consumer research shows that just 12 per cent consumers do not care about purpose and ESG. This obviously means that the vast majority (88 per cent) are more loyal to companies that put ESG at the heart of their business.

And the reality? The above figures are not in isolation. A quick Google search shows that there are literally thousands of other stats floating around that prove why ESG makes corporate sense, but ultimately, the bottom line is that businesses that fail to capitalise on the ESG agenda will lose out and will do so exponentially as the ESG snowball grows bigger and bigger and bigger.

**But businesses are struggling to operationalise their ESG strategy ** Accenture recently published some very depressing research. Only seven per cent of businesses have united their sustainbility goals with technology. In fact out of the 560 companies surveyed 93 per cent are still facing challenges in meeting their ESG goals. Moreover, of those that are on their way to meet their ESG goals, most aren’t proud of what they’ve done. Do another quick Google search and see how few press releases/case studies/opinion articles there are extolling the results of an ESG project. Now try Googling successful CRM and see what you get!

This is a big problem considering 51 per cent of organisations are approaching ESG as a growth driver. To succeed. You’ve got to convert intention into action – and actually get stuff done. ESG needs to be pragmatic.

**How to turn ESG intention into tangible results **

This pragmatic approach has been employed by DFS and Robert Dyas. Both businesses have made the decision to use reduction of energy consumption as an ESG driver. To this end both organisations invested in infrastructure which has enabled them to turn their sites into a state-of-the-art ‘data rigs’ that reports back information in real time. Having this data across the whole of the estate means that it is possible to reduce energy consumption by optimising the air quality, humidity, and temperature controls for each site. This is controlled centrally but can be activated locally through Edge computing meaning that store managers, for example, do not need to manually change settings or remember to turn lights and heating off. Additionally, pragmatic recommendations can be made on when the heating needs to be turned on and at what temperature to ensure the store or distribution centre is at optimum temperature for opening. The data is integrated with cloud platform for reporting and proactive maintenance and alerting for instance, the automated continuous commissioning self-identifies site issues, without human intervention, and can schedule engineer callouts if necessary. The approach to centrally managing the entire estate, means that changes to policy, such as air quality levels or temperature settings for COVID best practice can be rolled out to individual sites via a single central action.

Both businesses have been able to realise 27 and 30 per cent cost saving respectively based on the optimisation of their energy usage but as a bonus also improve employee productivity and wellbeing through enhanced air quality and temperature control. But the benefit of the data doesn’t stop there. DFS is using this insight to enhance the customer experience – creating new revenue streams for the business. ESG is not just saving money but should also be about growth and innovation.

**The nuts and bolts of it… ** So, ask yourself a few questions: • How many solar panels did you install across your estate last year? • How many of your building are smart with proper software and control beyond last man switch off? • How do you communicate your estate energy strategy? • Do you know at a granular level how the spaces you own/manage are engaged with to support space optimisation through to customer engagement?

If you don’t know the answer. You need to find out, as these are the real things that make a difference and turn intention into tangible actions that you can be proud of. Nick Robinson, Beyond ESG

This was posted in Bdaily's Members' News section by Beyond, Putting Data to Work Ltd .