The momentum towards environmental, social and governance (ESG) adoption is on a continuous increase as the proportion of global ESG users rose to 89% in 2022 from 84% in 2021.
ESG adoption is fuelled by client demand and a desire to make an impact. As ESG momentum continues to gain steam, investors are moving away from basic screening methods towards more targeted and sophisticated strategies, including thematic and impact investing. ESG integration remains the top implementation strategy and investors are taking a holistic approach to comprehensively embed ESG into the investment process.
Role of CIOs in adopting ESG goals in organizations
CIOs have become the go-to resource for navigating technology decisions as 58% of the business respondents see CIOs as the strategic advisor who can proactively identify business opportunities and make recommendations. CIOs are capable to establish an ESG strategy across the board and incorporate sustainability into their digitalization activities. CIOs can provide clear, data-driven insights and track progress toward the successful accomplishment of ESG goals.
Identify ESG goals for your organization
As their first step, CIOs must determine their company’s major ESG goals and then think about how technology can help meet those goals.
The following image shows the factors driving ESG adoption in different organizations.
Integrating ESG with digital strategy
After defining ESG goals and identifying the technology to realize them, ESG goals have to be integrated with the organization’s digital plan. This will provide organizations with the required agility from their digital transformation program while also achieving their ESG goals. The digitization process in technology companies can promote the measurement and tracking of ESG parameters like greenhouse gas emissions, energy consumption and water usage.
Sharing ESG goals and digital strategy insights
Digital technology and information support are not just enough, discussing ESG potential in advance with other enabling departments will help to know the projects that can be realistically undertaken.
Tacking challenges in ESG adoption
The key hindrance to implementing ESG is the lack of data.
Organizations need data to measure their progress in things like emissions, governance, diversity, equity, and inclusion. CIOs can help make this happen by talking to other people outside and within the organization about these systems and metrics.
The role of the CIO in corporate sustainability has recently grown, however, the approach to sustainability requires everyone’s involvement. Companies with good sustainable credentials will outperform those without them.