The drive to implement and improve ESG (environmental, social, and governance) programs has become a universal truth across industries ranging from manufacturing and energy to healthcare and finance. The Governance & Accountability Institute reports that 96% of S&P companies now publish annual ESG reports to demonstrate the impact of their programs to investors, industry partners, and the public in general. ESG is no longer a footnote for companies. Instead, it is now a key area of focus that demands more resources and introduces new challenges for organizations.
However, solutions to those challenges have been developing just as quickly. ERA Environmental Management Solutions offers powerful software tools for organizations throughout the automotive, chemicals, oil & gas, paints & coatings, and general manufacturing industries, to name a few. The company has been an industry leader in environmental compliance and reporting since 1995 and now provides a full suite of modules for companies to face environmental, health & safety, and sustainability challenges. At the core of those solutions is sophisticated automation that lets facilities meet their ESG goals with fewer resources and reduced costs.
The ESG Challenges Holding Companies Back
Developing and implementing ESG programs presents a significant challenge to any industry. While many organizations have gotten away with vague commitments and pledges in the past, the landscape has shifted toward greater scrutiny and higher standards. Now, companies must demonstrate concrete results to achieve success. Putting this into practice requires overcoming challenges in several key areas.
Data Reliability: Every aspect of a successful ESG program, such as benchmarking, setting goals, monitoring progress, and disclosing results, is built upon reliable data. However, gathering and managing the data to support a wide range of ESG metrics is no easy task. Many organizations struggle to implement efficient and effective methods to do so and may quickly find themselves falling behind.
A survey by Deloitte highlights the need for improved data accuracy and reliability in ESG disclosures. When surveyed, 35% of executives reported data accuracy and completeness as their top challenge. A further 25% cited data accessibility. Whether benchmarking and monitoring programs, preparing ESG reports, or working with third-party raters, organizations have a pressing need to collect and manage data in a way that ensures reliability.
ESG Program Standardization: Another key challenge to a successful ESG program is the standardization of data management and workflows across an organization. Many companies find themselves with multiple facilities or even different departments going about their ESG programs in markedly different ways. The disparate procedures, data collection and storage methods, metrics, and reporting practices across these units prevent company-wide visibility or collaboration.
The result is that such companies have no means to gauge the success of their ESG programs or disclose company-wide metrics. Data silos form within facilities or departments, locking important information in spreadsheets and databases only key individuals can access. Even when aggregated, the differences in data collection methods and formats can make compiling useful information a time-intensive, if not outright impossible, task.
ESG Disclosure: Even a company that has the means to collect reliable data across its organization still requires the means to provide information meaningfully to raters, investors, supply chain partners, and the general public. Identifying and calculating the proper metrics and preparing reports in the correct format are tasks that demand unique industry insight and significant time and effort to complete.
Companies of all kinds are committing significant portions of their budgets to improving their ESG ratings. A survey by sustainability consulting firm ERM revealed that companies report annual ESG rating spending between $210,000 and $480,000. Those costs include direct payments to raters for evaluations and benchmarks, consulting support, reporting tools, and time spent by internal employees.
Program Overhead: The bottom line is that any ESG program will demand significant resources. Organizations must commit the time of their expert employees, work with consultants, and license various tools to get the job done. However, many companies make this more complicated than it has to be through inefficient use of their time and money.
One of the biggest mistakes is relying on time-intensive workflows. Data entry and management through spreadsheets, updating factors used in calculations, generating reports, and other tasks that could benefit from automation are left to EHS experts instead. They create a disproportionate drag on their valuable time, costing companies more.
How ERA’s ESG Automation Addresses These Challenges
No doubt, companies face significant challenges in realizing the full potential of their ESG programs. However, automation provides a cost-effective solution for many of those challenges. ERA implements automation in a variety of ways throughout its environmental, health & safety, and sustainability solutions. Its clients are able to reduce ESG-related costs and ensure higher-quality data for benchmarking, monitoring, and disclosure. ERA works closely with clients to ensure they receive the unique implementation needed to provide these benefits (and more!) for their ESG programs.
Effortless Data Collection: Automation significantly reduces time spent collecting and managing ESG data from a wide range of sources. Instead of committing hours of employee time to spreadsheet data entry, a versatile software solution can keep data up to date at all times. With ERA, organizations have a centralized platform that draws their data from various sources. Its Universal Import feature allows for automated bulk data upload from an extensive range of sources on a routine schedule.
ERA maintains a Master Library of emission factors to support ESG reporting and environmental compliance. This extensive library encompasses a wide range of factors, such as those related to electricity, combustion, mobile emissions, waste, and many others. These factors are categorized not only by country, state, or province but also, in some instances, by specific industries and scope. The Master Library serves as a comprehensive resource for accurate and detailed data on emissions factors.
Complete Standardization: Standardizing the metrics and workflows used in ESG programs across an organization can significantly reduce the time spent dealing with data from different sources and ensure the maximum impact of those programs. ERA’s software provides a central platform where data from all facilities and departments is stored and managed in a way that provides complete visibility and accessibility. The same data collection tools, smart forms, and other resources are used throughout the organization.
This standardized data provides a solid foundation for the wide range of ESG metrics that ERA’s software can calculate. Organizations can rely on a built-in library of standard metrics for scope 1, 2, and 3 emissions, carbon offsets, renewable energy credits, and more. Custom metrics maintain a consistent approach to every area of ESG across the company.
Streamlined Report Generation: After automation has already handled data collection and ESG metric calculations, organizations can reduce overhead even further by streamlining their report generation. ERA provides tools to automate both internal and external reports to aid organizations in benchmarking and monitoring programs, along with ESG disclosure for compliance, certification, and communication with partners and the public.
ERA’s library of environmental and ESG reports makes maintaining compliance as straightforward as possible. Custom reports let organizations provide clear and concise ESG information for their unique compliance, certification, and disclosure needs. Instead of having employees spend hours digging to find the correct data, ERA’s software automatically populates reports with the right values, calculations, and metrics.
Overall Cost Savings: The end result of the advanced automation provided by ERA’s solution is a significant reduction in ESG-related overhead. Organizations devote less of their experts’ time to data management and report generation, letting them focus on other vital projects. There is no longer the need to invest in a broader range of software tools to achieve the same tasks. Improved reporting and compliance mean a lower risk of penalties and fines from various regulators.
An internal case study has clearly demonstrated the cost benefits of ERA’s software. On average, OEM clients in the automotive industry saved over 2,550 hours a year with ERA’s Environmental Management System. Based on typical EHS department salaries, that adds up to $226,950 saved per year. This substantial ROI means that most clients report a payoff period and profits within 12 months of starting their journey with ERA.
Putting Automation to Work in ESG Programs
Organizations can’t afford to go without ESG programs in the modern landscape. However, they also can’t afford to go into those programs without the right tools. The costs of implementing ESG programs can quickly become prohibitive without the right approach. Automating data collection and management, calculations, and report generation reduces ESG overhead, allowing for successful programs that don’t break budgets. ERA Environmental Management Solutions provides the tools, custom implementation, and support that have made that success a reality for many organizations.