Earth day 2023: Time to contemplate (and act on) corporate responsibility
The first Earth Day, held on April 22, 1970, was a product of some troubling times. Among other mishaps, a massive oil spill off the California coast killed approximately 10,000 marine animals, Cleveland’s Cuyahoga River caught fire and a smog disaster killed several hundred New Yorkers over Thanksgiving weekend in 1966. This led to a small group of activists and politicians putting together the idea for a national day dedicated to education and action aimed at restoring the planet and protecting its inhabitability.
Today, more than 1 billion people engage in Earth Day events across 193 countries. Corporate and mission-driven organizations also frequently leverage Earth Day to demonstrate to their customers, constituents and other stakeholders how they too are pursuing sustainability.
– Kathleen Rogers, President of EARTHDAY.ORG
A Clear Call to Business Leaders
The theme for Earth Day 2023 is “Invest in Our Planet.” In launching the theme, Kathleen Rogers, president of EARTHDAY.ORG, said, “In 2023, we must come together again in partnership for the planet. Businesses, governments and civil society are equally responsible for taking action against the climate crisis and lighting the spark to accelerate change towards a green, prosperous, and equitable future.”
What makes the theme interesting is the clear focus on enterprises more than individuals. There is a clear call to business leaders to understand their role in climate change and take action. Clearly, legislation in every geography is reflective of this sentiment. An increasing collection of laws requires companies to collect, analyze and report on carbon emissions and other sustainability metrics. Board directors and CEOs are under pressure to articulate accurate company performance against these goals and to clearly describe plans to measurably contribute to a more sustainable future.
Engaging Investors, Anticipating Activists
Investors, consumers and other key stakeholders are not only interested in ESG reporting; they are using it to decide where to deploy their capital and which brands to buy. Also, new legislation — such as the recent SEC recent climate ruling in the United States and last year’s passage of the Corporate Sustainability Reporting Directive (CSRD) in the European Union — are rapidly moving ESG from nice-to-have to regulatory requirement.
There’s also the issue of shareholder activism. While the effectiveness of environmental demands on the part of activists were less successful (11.5%) in 2022 than in 2021 (25.8%), it’s clear that companies need to show a connection between their financial performance and their ESG credentials. As global growth is projected to slow in 2023, there will be increased focus on bottom-line performance.
So, it will be important for senior leaders to address and mitigate the ever-evolving risks of shareholder activism. Complete visibility into organizational data is the first step towards building a strong position and reducing vulnerability to investor, shareholder and legal action. Leaders need a 360-view of data across their organizations, so they can be armed with the right information to exercise strong risk oversight and document their efforts in defensible and auditable detail.
Exploring the Notion of “Investment”
Historically, most companies have viewed sustainability — and, more broadly, ESG — as a cost center built expressly for the purpose of addressing regulatory compliance. It’s been more of a box-checking necessity than a value-creating strategy. But for forward-thinking enterprises, that has begun the shift recently. One evidence of this change is the appointment of chief sustainability officers (CSOs). After these roles were filled, companies with vision developed specific strategies for leveraging ESG-driven change that is designed to create new, commercially viable offerings. These solutions will increasingly be in demand as the world becomes more serious about sustainability.
The current evolution of ESG strategies leads us back to the 2023 Earth Day theme, “Invest in Our Planet.” An investment implies that engaging in sustainability strategies will provide a return. It’s not just an expense but a mechanism for improving topline growth or bottom-line profitability — or both.
A Massive, New Data Collection, Analysis and Reporting Challenge
Developing effective growth strategies requires the collection, analysis and reporting of sustainability data that’s scattered across multiple sites, servers and supply chains. It’s a new challenge for many organizations, but a necessary one, because CEOs, board directors and other leaders need insights to make profitable decisions regarding ESG.
For some organizations, this may lead to new ventures in multi-trillion-dollar industries, such as clean energy, regenerative agriculture or sustainable water management. For others, it may involve incremental changes to current portfolios. But either way, it’s going to require a lot of data, analysis and collaboration between teams across an enterprise.
Inspired By Earth Day? Start Here
Earth Day provides a good reminder for enterprises to spend some time contemplating sustainability goals that go beyond compliance. With the right insights and an informed strategy, an Earth Day-inspired plan can create great financial and reputational value for your enterprise. Your organization is likely already anticipating, and investing in, strategies for addressing ESG needs. But if you and your colleagues gather to discuss ways to initiate or progress sustainability efforts, consider these questions as conversation starters:
- Why change? To maintain stakeholder support and keep them engaged, you need to demonstrate that you are truly committed to ESG efforts, which must evolve as ESG demands evolve.
- Why now? Stakeholder activism has climbed in the past couple of years and continues to do so — companies need to invest in culture change as activism risk and increasing regulations make ESG a business imperative.
- Where do we start? A good first step is to explore technologies that offer the in-depth data reporting you need to assess current ESG performance and work toward actionable, measurable improvement goals.
A Purpose-Built Platform for ESG
Diligent saw the need for in-depth data reporting capabilities that companies need to assess ESG performance and develop actionable, measurable growth strategies. Our Diligent ESG solution saves time and resources by enabling automated and auditable data collection, cleansing, analysis and reporting across over 2,000 fuels and business activities, including all Scope 1, 2, 3, CSR and supply chain data sources. Built-in global emissions factors and calculations give our users confidence that the data is automatically converted and reported accurately, drawing from 70,000+ globally published emission factors across over 120+ countries. Reports generated with Diligent ESG are 100% auditable with complete calculation transparency and change logs featuring third-party certified calculations and specific audit-compliant user roles and permissions.
If you and your team are planning to use Earth Day 2023 to reflect on your ESG strategies, make time to explore the ROI of a solution like Diligent ESG.
