Research by data company Profusion has revealed that although 94% of businesses say Environmental, Social and Governance (ESG) is important to them, nearly half (48%) admit that there has been no significant work done to capture baseline data and develop data-driven ESG plans.
The survey of 200 business leaders at medium-large British companies found that 55% state that employees have not been involved in developing operational targets and KPIs, and 56% claim that employees do not have access to dashboards to see how their organisation is tracking against their targets and KPIs. This suggests that there is a widespread disconnect between stated desires to prioritise ESG and implementing policies that will enable them to effectively implement change.
Of the three ESG areas, Environmental is a top priority for 70% of the businesses surveyed, while Governance and Social are a priority for only 15% and 14% of businesses respectively.
Only 36% said that their environmental commitments have been turned into completely actionable plans (including changes to targets and KPIs).
When asked what the top three barriers to converting environmental commitments into actionable plans are, 39% said fear of cost implications, 30% fear of disruption (or change) and 27% a lack of internal knowledge and expertise. The same question was posed regarding social commitments: 32% said fear of cost implications, 23% leadership resistance and 22% fear of disruption (or change).
The top three priorities, in relation to Governance issues, cited by businesses were cyber security (42%), risk management (41%) and diversity and inclusion (41%)
Natalie Cramp, CEO, Profusion, said: “There is a clear and strong appetite among business leaders to implement ESG policies and standards, but many are failing to put in place any mechanism to measure its impact. Unfortunately, without that they are essentially fumbling in the dark. For the policies to have an effect, businesses need to use accurate data and empower teams to be able to access and, most importantly, understand the data. This will enable organisations to build on existing standards, improve them and fill any gaps.”
The research follows the launch of Profusion’s ‘Good Data Guide’ in partnership with Pinsent Masons LLP. The Guide, which was made in consultation with representatives from
London Stock Exchange Group, Oscar O’Connor & Co and others, provides one of the most practical frameworks to date for how organisations of any size can use data ethically.
Profusion’s research has also found that the vast majority of UK business leaders are struggling to use data ethically within their organisation, with 83% feeling ‘morally uncomfortable’ about how their company uses data.
Despite 79% of businesses declaring that they wanted to address data ethics challenges, only 31% stated it was among their top three governance priorities. When asked what the biggest barriers to addressing data ethics were, 36% said lack of internal knowledge and expertise, 31% lack of training and 30% lack of perceived relevance.