Deloitte’s 2023 global survey found that the threats posed by climate change are a top issue for the C-suite. Despite this, most organizations are lagging in their efforts to address the challenge, with KPMG finding that 75% of companies are not ready to have their environmental, social, and governance (ESG) data audited. And with new data regulations coming into effect in 2024, it’s imperative that companies rethink their sustainability approach; otherwise, they run the risk of being viewed as greenwashing.

To get ESG efforts on track, organizations need to:

1. Take a systematic approach and understand their entire operating environment, including the supply chain, to identify emissions, redundancies, and technologies not fully utilized. Too often, organizations rely on spreadsheets rather than software to track ESG progress, which drives reactive decision-making. What’s more, this can create data discrepancies, which in turn fuel greenwashing claims.

As pressure mounts to provide transparency into sustainability initiatives, it’s vital to have robust data to support and direct efforts. Companies need a reporting environment with high-quality data and traceability. Dedicated software can help track progress toward targets by automating emissions measurement and providing information that allows organizations to adjust their strategies based on trends and patterns. In addition, businesses can gain predictive insights and recommendations by harnessing emerging technologies such as AI and ML.

2. Purge data and software. Another often neglected consideration is that companies are reluctant to purge any systems or data that are no longer useful. A recent study found that 67% of organizations are unaware of the environmental consequences of their data storage strategies. To meet ESG targets, businesses must understand and manage their information estate and embrace that decluttering data is a business and moral imperative. 

As the volume continues to grow exponentially, adopting efficient data management strategies is critical. Taking steps like archiving and deduplication helps organizations meet sustainability goals. There are also business benefits, including improving productivity and lowering costs. 

In addition to data management, organizations must regularly audit the IT environment for redundancies, inefficiencies, or unused technologies. With today’s mix of legacy systems and digital transformation initiatives, this is a common and growing problem across industries. Without visibility and clarity on how elements overlap and perform, this can drive up storage costs and use unnecessary compute power. Running an inefficient tech stack creates technical debt, along with hampering sustainability efforts. Technical debt is a critical KPI to track that directly impacts ESG efforts.

Companies must work with the broader ecosystem to take steps to reduce the carbon footprint caused by their combined operations. With net zero targets looming in the distance and the upcoming disclosure regulations, organizations must act now to make ESG goals a foundational element of their business strategy.