Our industry is engaged in an important dialogue to improve sustainability through ESG transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position.
This article aims to outline best practices for operationalizing sustainability performance data and emphasize the benefits of fully embedding sustainability within operational strategy.
Many firms and organizations already have loosely defined sustainability strategies in place or have engaged in sustainability reporting to various frameworks and standards. However, when a firm engages in corporate sustainability efforts as a way to check a short-term box in the face of investor and consumer pressure, they will inevitably find themselves lacking in the implementation expertise necessary for their sustainability goals to work. This can hold back progress from stated goals leaving firms vulnerable to greenwashing claims. Only when sustainability data is viewed not as a vanity metric, a cost to bear, or a regulation to be met, but instead as an integral part of business functions will firms be able to unlock the benefits of sustainability data collection.
Successfully operationalizing this sustainability data can be challenging, and often requires a reversal of the stereotypical view that “sustainability” in an organization is synonymous purely with environmental activism and charitable PR efforts to meet consumer and investor expectations that a business should work in harmony with the public good. Sustainability is also about overall cost reductions, risk management, and strengthening the long-term operational efficiency and viability of a firm’s internal business teams, technology, procured assets, and goods and services.
Ensuring data is of high quality
Data is an essential component of growth and strategy; after all, only what gets measured gets managed. One of the first and foremost challenges of proper sustainability data operationalization is the inability to collect and efficiently organize sustainability data in the first place. Firms must be sure to consider multiple sustainability dimensions within their overall portfolio of data; for example, metrics on carbon emissions, land use, recycling and waste, water use, and energy use. Sustainability data should also be of high quality, auditable, transparent, comparable, screened for errors and data gaps, and tracked continuously over periods of time. Only once this level of high-quality data is achievable for a firm can they begin to integrate energy and sustainability data seamlessly within overall business functions.
Practical considerations when operationalizing sustainability data
Optimizing data toolkits and organization
A lack of effective and automated tools is holding firms back from properly collecting and sharing data across business units. Sustainability data tools should be as robust and feature-rich as operational and financial systems, and possess flexible integration capabilities to share data across all CRM, AI, and cloud-based applications utilized by employees. For example, carbon accounting or pricing software tools should be able to seamlessly connect to energy data collected at the source and to the platform where financial risk assessments and reporting takes place. Additionally, it is important that most employees have some level of access to these tools and delineated dashboards with the pertinent metrics to their teams for planning and operations.
It is likely that effective sustainability operationalization cannot occur when data is collected and analyzed within manual entry spreadsheets. Firms should strongly consider optimizing their data to generate actionable insights through the use of automated, cloud-based sustainability data management systems. While the upfront costs of these platforms may be a deterrent, the time and labor saved, or errors diminished by eliminating manual data entry is a worthy return on investment. These systems can also provide a single source of truth for both energy and sustainability-level data where team members can turn to pull data and generate reports. Automated data capture that can monitor sustainability over time at both a meter level and portfolio wide view is invaluable. A feature that can track progress and goals over time in both the short term and long term is also priority for firms looking to see continued improvement and true sustainability integration within the business.
Fleshing out the context behind your performance data results
Always start by considering the why behind the metrics and KPIs. Why is the energy use of your buildings high, why are your carbon emissions beyond your threshold? This ties heavily into conducting deep dives within your internal processes and across business teams to uncover the hidden inefficiencies and root causes of insights yielded by the data.
Viewing sustainability performance data as an efficiency metric and determinant of cost savings
KPIs, energy, waste, water, and sustainability metrics are of little to no consequence unless someone takes responsibility for turning the insight into an action. Facility managers and engineers can use sustainability metrics on building performance, waste, energy use, and more to identify easy to fix problems within current in-house processes that may be contributing to excess resource waste (i.e. electricity usage times and leakages). Performance data on sustainability that is integrated with energy use can often reveal unusual variances or statistical oddities within data collected continuously over a period of time that employees can use to implement new technology or methodologies to improve energy efficiency and ultimately reduce costs.
Revisiting the roles for sustainability currently defined within your organization
When a sustainable strategy is not integrated transparently into performance management, such as emissions targets the CEO communicates, how does the company get there? Sustainability data and ESG reporting on the surface can appear very far removed in application from the technical and financial teams within a business, especially when “sustainability” roles are typically siloed and set up as separate business functions. Sustainability should not operate as a one-off, separate initiative within the corporation, but it should be treated as a core business function that is understood well by those that will ultimately be the ones executing efficiency measures and gathering data (engineers and facility managers).
Redefining the employee culture surrounding sustainability
Consider whether your sustainability strategy is thoroughly understood by those on the front lines of delivering them. Ensuring that sustainability information and the impact desired by the firm is clear to all employees is integral to successful long-term goals. Developing data literacy among staff and employees, making sustainability data easy to access by all, and making individual business units responsible for their own sustainability initiatives is a great way to cultivate employees capable of operationalizing the sustainability data.
Understanding that sustainability data can be used to manage risk
A sustainability strategy can be key to supporting the risk management plan of a company and the data may be decision-useful for finance and procurement teams. Organizations can minimize future risks and maximize future opportunities through climate-related risk assessments, and leveraging the risk to investor interest associated with progress on sustainability goals.
Key Takeaway:
Firms should do well to remember that sustainability data on its own is not especially valuable, and collecting this data to simply stop after putting together a one-off sustainability report is a failure to properly operationalize. Bringing together day-to-day operations and sustainability data can yield cost reductions, enriched risk management, and long-term operational efficiency.
This article was written by Caroline Pittard, Marketing Content Specialist, at WatchWire.