By JD Capuano
Sustainability professionals should have a fear of missing out … on data.
Data are crucial to decision-making in businesses. Period. You simply don’t have a seat at the table without meaningful data.
Sustainability data are typically high-level, gathered for external reporting, disconnected from business performance, and not very actionable. Such limitations prevent sustainability professionals from making a convincing business case.
This is the exact opposite of business-critical data used to analyze and improve company performance. It's also a key reason executives don't take sustainability seriously enough.
So, why do we take a backward approach to sustainability data?
NGOs and investors played the leading role in convincing companies to address environmental, social and governance (ESG) issues. Consequently, 81 percent of S&P 500 companies published sustainability reports last year, detailing their ESG performance. Thus, corporate sustainability evolved to focus more outwardly than inwardly.
Don’t get me wrong. Communicating progress against goals and making disclosures more transparent are both important. However, sustainability is growing up. It needs detailed analyses that link to corporate objectives to get to the next level.
If you work in sustainability or corporate social responsibility (CSR), you may think that your focus is internal. But is it really? Stop and ask yourself the following:
Do sustainability data drive C-suite decisions in the same way as production, sales and marketing data?
I doubt you can answer "yes" unless your company already sees sustainability as a growth opportunity.
Cost centers receive limited resources. To make matters worse, sustainability often gets further marginalized by being considered a nice-to-have function. As a result, CSR professionals face a steep uphill climb to influence systemic changes to operations, strategy and culture.
Data can make the climb easier.
Let's take a manufacturing example. First, imagine seeing key sustainability drivers at any level of detail – by product line at one factory, by SKU or for an individual unit. Next, imagine drilling down into those drivers at almost any level (business units to individuals, regions to buildings, etc.) and comparing differences.
How do you get there?
You may be thinking software, but the first step is creating a nexus between data and sustainability.
Most sustainability professionals aren’t data scientists and most data scientists don’t have much knowledge of sustainability. While cross-pollination of sustainability and data expertise is beginning to take place, it’s not happening fast enough.
Fast enough means at least one person on every sustainability team learning basic data literacy as quickly as possible. It will make your team more effective at managing internal or external data resources.
Learn to code in R or Python if you want to go much faster. Did you know CEO Jeff Immelt recently announced that every new hire at GE will learn how to code? Even if you want to code, start with data literacy. Connect with data scientists or business analysts at your company. Ask them about their work and where you can get started.
Data literacy is especially important for sustainability software. If you learn a platform’s capabilities, you'll know how to collect and feed it more data to supercharge your analytics. That's where the power of data really takes off.
Despite what we read in CEO surveys about its importance, working in sustainability often has the feel of eating at the kids’ table. Fun as that may be, as we grow up we want our voices heard and taken seriously at the adults’ table.
Data drive those “adult table” boardroom conversations. Get heard by using data to uncover compelling stories that matter.
Collect granular data. Apportion them where necessary. Connect sustainability impacts to business drivers. Look across the enterprise and dive deep where it makes sense. When you have enough, the data will guide you (along with your business acumen).
Companies putting an internal price on carbon, setting science-based goals, and mapping supply chains represent some of the most detailed uses of sustainability data today. Not many companies have developed an internal price on carbon or had their science-based goals approved due to the resources required (though the list of companies taking the pledge grows steadily). And transparency issues hold back supply chain mapping.
I'm not saying any of this is easy, but I am arguing that it's worth the effort.
Smart, detailed analysis will influence senior management to think bigger about unlocking the potential in sustainability. You can wield such influence by learning to analyze data in a way that’s meaningful to business priorities. Getting good with data takes time and resources, but can inspire innovation, competition and profitability.
Data-driven sustainability insights can transform how executives think in this age of disruption. And that deserves a seat at the table.
Image credit: Flickr/Sebastian Sikora
JD Capuano co-founded Closed Loop Advisors, is a strategist for Third Partners, and teaches about data at Bard College’s MBA in Sustainability. He is a problem solver using strategy, data, technology and imagination to address social and environmental problems.