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Sustainability

ESG: Do I need a software solution or a services partner? Or both?

Through precision consulting and industry-leading technology solutions, experts like Julian Tharsis and Bianca Covlescu guide Schneider Electric clients on their sustainability reporting, compliance, and data management journey.

Contributing Experts:

 

Julian Tharsis, Global Sustainability Reporting, Compliance and Analytics Director

 

 

Bianca Covlescu, Senior ESG Solutions Lead


 

In a world driven by data, the pressure to be digital has never been greater. For business leaders to manage data-intensive sustainability and ESG programs, technology has shifted from nice to have to a prerequisite.  With international operations and thousands of employees, businesses today not only produce, but must “manage torrents of data” – more data points than they can humanly keep up with. Inevitably, the various aspects of an ESG strategy are interconnected and global data must first be centralized to be made useful for performance management (reactive) or innovation (proactive) purposes.

The aggregate confusion and changing landscape around ESG regulation continues to cause headwinds in ESG management. What’s more, new software start-ups and technologies are coming onto the scene pushing for participation in a more digitized approach to sustainability, efficiency, and ESG. In January 2023, Verdantix projected a compound annual growth rate of 30% for the ESG reporting software market between now and 2027.  The exercise of finding and selecting the right technology provider for a business requires both research and diligence, but it often results in overwhelm.  To assess any sustainability technology provider, a business must weigh a whole host of factors: business purpose, technology requirements, ROI, budget, the vendor’s reliability, cybersecurity standards, commercial terms, API capabilities, and so on.  The evaluation and RFP process can take months and by the end, the desire for an outcome can cloud judgement.

Complement Your Data Strategy with Human Expertise

It may be difficult to find technology solutions that check every box on an organization’s list of requirements. As a result, compromise and new ways of working often surface in these discussions. However, one factor a company should rethink before compromising on, is the degree of support and human expertise the vendor provides. Achieving success in the digital transformation of an ESG strategy doesn’t just require shiny new technology; it demands sprawling employee adoption, change management, stakeholder alignment, precise implementation, and a fundamental grounding in human expertise. Understanding the depth of implementation support, ongoing consultation, and access to experts may seem like just another part of the software selection process, but the level of support offered will play a key role in the bigger digital transformation needed for ESG.

Unfortunately, the sustainability skills gap is a real challenge that organizations are facing today.  Highly specialized sustainability and ESG positions are emerging faster than talent can be upskilled. If an organization or team happens to be in the minority, having access to internal sustainability and ESG experts to guide strategy and technology implementation, a job well done is in order.  However, the countless organizations facing a sustainability skills gap should consider not only shopping for an ESG software solution, but also an ESG software and services partner.  Without the internal sustainability and ESG expertise to set, manage, and guide an organization-wide ESG strategy, technology alone will only offer a short term win vs. enduring business success.

The Formula for ESG Success

Even with the most advanced technology, the right people, and the right partner, the participation of a company’s leadership in a digitized approach to sustainability is key. Whether the human expertise is internal to an organization or outsourced to a partner, the marriage between technology and people is at the core of what we believe will generate true success in ESG.

Only with the appropriate technology and experts in place – all driven by an overarching mission – can data be completely maximized and aligned to a company’s ESG purpose.

As the digital age blazes on, don’t let the pressure to be digital breed a lopsided ESG strategy.  Indeed, technology equips us to work faster, smarter and centralize data in ways we never dreamed of, but it cannot replace human capital skills like change management, data interpretation, leadership, empathy, and qualitative expertise.  For an ESG strategy to thrive in the digital age, transformation is in order and technology + human intelligence is central to this tall task.

Learn more about Schneider Electric’s unique position as a single solutions provider for ESG here.