The Business Case for ESG Strategy

Transparency is becoming increasingly important up and down the value chain. Stakeholders are showing increased interest in sustainable businesses. Being able to transparently share all ESG data, which includes scope 3 emissions, is a competitive differentiator that has the potential to drive increased business to organizations that report regularly.

Scope 3 emissions comprise the emissions not in your company’s control and includes those of your suppliers, distributors, partners, customers, and more. This makes them very challenging to track. However, scope 3 reporting is necessary for companies who want to report on their carbon footprint, and soon it could be required to stay in compliance with government regulations. Regardless of how the regulations pan out, reporting on ESG metrics for your entire value chain allows you to meet stakeholder demands while building trust in your company.

Transitioning to sustainable business practices can spark innovation, which can result in new products and services, smarter, more efficient ways to approach tasks, and more interest in and demand for your offerings. Put simply, sustainability goals can lead to more innovative thinking, which can have tremendous benefits for all areas of your business.

Innovative thinking can manifest in various climate-related opportunities. For example, a shipping company may want to reduce the number of trips it needs to make on a particular route. After realizing it often ships with empty space in freight trucks, the company invests in a unit-load optimization tool to ensure its trucks are packed without wasted space. This reduces trips, which saves on both emissions and costs. Investing in sustainable transformation allows companies to discover more efficient ways of completing standard business processes.

In addition to operational efficiencies, innovation can come from new products and services. At Salesforce, for instance, we needed an accurate and auditable single source of truth for managing our environmental footprint across scope 1, 2, and 3 emissions, so we created an app for our own use. Eventually, this became Net Zero Cloud, which provides our customers with the same level of sustainability management as Salesforce. Now, it’s exciting to see other companies adopt this tool and use it — not only to see progress made on their sustainability journeys, but also to see how they’re accelerating their stakeholders’ path to net zero as well.

Employees want to work for purpose-driven organizations. Roughly eight in 10 employees report being happier if they feel a sense of purpose and belonging at work. We consistently hear that our sustainability and social responsibility leadership is a key reason people choose to come work for Salesforce.

Approximately 40% of millennials have chosen a job because the company performed well on sustainability. This same survey reported nearly 70% of respondents said that if a company had a strong sustainability plan, they would be more likely to stay with that company. Prioritizing sustainability is a highly effective way to engage employees, especially when every employee has an opportunity to help the organization achieve its sustainability goals.

Now that you understand the business value of sustainability, it’s time to make the case for your company. Whether you're part of a small business or a multinational corporation, sustainability can both drive value and reduce costs for your organization. By using the seven benefits listed here, your business case can offer ways for every leader, function, and team to benefit from tangible sustainable business practices. This will lead to additional buy-in for your vision.

Once you have sufficient buy-in, you’ll need an ESG strategy. Your strategy needs to address all areas of ESG — environmental, social, and governance. Here’s a quick breakdown of what that means:

Then you’ll need to execute on that strategy and accurately report on ESG metrics — all while still cutting costs and realizing more efficient ways of doing business.

Balancing all of this while understanding and navigating the complexity of ESG reporting can be challenging. But with the right tools, you can manage ESG data in real time, streamline the reporting process, and become more efficient as a result.

One way to do this is with Salesforce’s Automate ESG Reporting solution. This solution integrates data from disparate systems, tracks progress in real time, creates intelligent insights, and generates accurate and complete reports that align with voluntary reporting frameworks. Automate ESG Reporting combines the best of Net Zero Cloud, Tableau, Customer 360, AppExchange, and Salesforce partners to gather environmental, social, and governance data into a single source of truth and automate the reporting process.

Improving your technology allows you to expand reporting capabilities and align to global standards as ESG regulations and climate disclosure rules roll out. The time to act is now. Seize the moment for ESG reporting, address compliance needs, and grow your business value — all while reducing costs and increasing productivity.