04 Jun Information’s Role in ESG
While ESG used to be just another business acronym, it’s now a force to be reckoned with. The term – which refers to an organization’s Environmental, Social, and Governance standing – is increasingly affecting investment decisions.
Investors are looking more and more at companies’ non-financial criteria. Basically, they’re choosing to align their money with their values.
Right now, ESG reports are voluntary in the U.S. No one requires a company to release one. However, many predict that these reports will soon become standard practice.
Information professionals have an opportunity to play a significant role in ESG. The reports, whether voluntary or mandatory, will require readily available Environmental, Social, and Governance-related information. Here’s what you’ll need:
ENVIROMENTAL, SOCIAL, AND GOVERNANCE INFORMATION
ESG’s environmental standards relate to an organization’s impact on the environment. While a lot of the environmental information reported will be industry-specific, there are some common criteria that all types of companies can report on, including:
- Position on climate change.
- Waste management efforts.
- Energy conservation efforts.
- Air and water pollution statistics.
ESG’s social standards concern an organization’s relationship to others, which can mean a lot of things. A well-rounded social report can include information on:
- Employee wages, salaries, benefits, etc.
- Employee training programs.
- Employee satisfaction.
- Its commitment to diversity, equity, and inclusion.
- Its volunteer and philanthropy efforts.
- Its relationship with other businesses.
- Its reputation within the local community.
ESG’s governance standards look at an organization internally at its management, or how well executives and the board of directors run business. Information in this section of an ESG report would include:
- Executive compensation.
- Board compensation.
- Financial reporting transparency.
- Stakeholder relationships.
- Any ethics reporting process.
While this isn’t a complete list of information needed for an ESG report, it’s a good start. The good thing is that all of this information is (most likely) already housed in your organization’s content repository, which presents a new opportunity for information professionals.
INFORMATION PROFESSIONALS’ ROLE IN ESG
As companies start the process of creating an ESG report, a designated team will need access to information across the entire organization. And if they don’t know where to find the needed information, it’s going to be extremely difficult to pull all of that together.
To avoid that roadblock, here are our information governance tips to prep for an ESG report:
Review your enterprise data map to help the team find what’s needed.
The information needed for an ESG report isn’t just sitting in one common place. Instead, it’s most likely housed in various departments’ repositories.
Information for the environmental portion of the report could be housed within a Sustainability Department, while information for the social portion could be housed within HR or an External Relations group.
While the designated ESG team may know what information they’re looking for, they probably don’t know exactly where to find it. But an information professional should.
If you’re in that boat, the enterprise data map may help the team find what’s needed.
Re-evaluate your security model to support cross-collaboration.
Once the ESG team knows what information they need and where it is, they’ll also need access to it. If your department repositories are restricted, you may need to review restrictions for some documents within those repositories.
For example, non-HR employees may not have access to client satisfaction survey results. However, if your organization chooses to disclose that information in the ESG report, the team will need permission to access that.
Reinforce content repository use to empower the team.
Change management is never a “one and done” effort. If you’ve slacked a bit on the reinforcement stage of change management, it’s probably a great time for a refresher course – especially for any ESG team members.
They’ll be finding and compiling so many different types of content, housed in different areas of the content repository system. So, it’s going to be a very time-consuming process if they don’t know how to properly use and navigate it.
If you haven’t already, host hands-on training, provide easy access to training guides and videos, and form a support system to address any questions and issues.
Look to The Principles® to maximize your information’s business value.
In any project (and even just day-to-day operations), we encourage information professionals to use ARMA International’s Generally Accepted Recordkeeping Principles®:
Whether you’re helping a team pull together information for an ESG report or carrying out some other organizational project, you want to provide the most business value possible. Information tells a story, so incorporating these eight principles and following best practices will help maximize your contributions.
For more, stay tuned for our next blog: “Information Tells a Story: IG Best Practices for Maximizing Business Value.”