Recent regulatory developments and climate-related disclosure rules are resulting in a great focus on sustainability by businesses. A report recently published by Morgan Stanley’s Institute for Sustainable Investing notes that while many businesses are becoming more sustainable for the sake of compliance, even more — 85% of businesses surveyed — are doing so because they see sustainability as the foundation for value creation.
This is heartening because we firmly believe that sustainability is not only beneficial in addressing environmental issues, but it also offers opportunities for product innovation and a way to achieve competitive advantage. Additionally, it can improve relations with investors, customers and employees who believe that companies must appropriately manage their environmental impact. Companies can often see how they’ll benefit from becoming more sustainable. The challenge is in actually getting there.
Sphera has been guiding businesses toward greater sustainability for decades, so we’re familiar with the challenges that can make their journey a bumpy one. For those companies that are just getting started, here are a few things to keep in mind:
- Sustainability means different things to different businesses. For one company, complementing their fleet of delivery vehicles (that have internal combustion engines) with electric vehicles might be the right way to go. Businesses must determine where they can have the greatest impact and then focus on that.
- The sustainability effort might have one person at the helm, but everyone needs to understand where the company is going, and everyone needs to be involved. Engaging people outside the sustainability team will give people ownership and create more enthusiasm, and this will generate better results more quickly.
- Company leaders must make sure that the right tools are available for the effort, and data is key. Now that the CSRD is in force and the state of California’s and SEC’s climate-related disclosure rules have been proposed, more businesses require sound, auditable data to meet their reporting obligations. Even without these disclosure requirements, a business cannot convincingly demonstrate that it is more sustainable without data. To make the best use of data, software is needed.
While the path forward will look different for each company, all companies need to address sustainability at four levels: enterprise, operational, product and supply chain. While this adds to the complexity of the effort, the alternative — a piecemeal approach to sustainability — will not stand up to scrutiny or external audit. A company might reduce its Scope 1 GHG emissions, but if it fails to tackle the emissions linked to its supply chain, stakeholders will overlook its Scope 1 success.
Organizations need an integrated offering with capabilities and tools that can be applied to address their pain points and facilitate progress at all levels. This is what Sphera’s Integrated Sustainability Solution is designed to do. It helps companies:
- Collect and aggregate relevant data from across the business.
- Measure the environmental impact of its full product portfolio with accuracy and remarkable efficiency.
- Gain access to the supply chain data needed to measure Scope 3 emissions.
- Reveal ESG-related risks, such as forced labor or other human rights abuses, that might be present in their supply chain.
- Track ESG regulatory developments and meet reporting obligations.
- Identify emissions hotspots for targeted action.
Auditable data is very important given the assurance requirements of the CSRD and SEC proposed rules. This is where many organizations struggle, especially when it comes to gathering and aggregating data for Scope 3 measurement and reporting. With the data collection capabilities of our cloud-based platform, companies get the data they need for measurable, actionable and auditable ESG and sustainability reporting.
Our Integrated Sustainability Solution also includes our DEKRA-verified life cycle assessment (LCA) database. Updated annually, the database currently contains more than 20,000 datasets, making it the world’s most robust and reliable LCA database. It allows sustainability professionals to rapidly calculate the environmental impact of products and entire product portfolios.
In addition to our LCA Software and Managed LCA Content, the Integrated Sustainability Solution includes software and services that help streamline ESG reporting and facilitate sustainability progress.
- Corporate Sustainability Software helps businesses track their carbon footprint by product line and across all geographies with its global-scale enterprise design.
- Environmental Accounting Software enables the reporting and management of waste and water emissions, as well as air/GHG emissions. It allows organizations to pull data for individual assets, so they can identify the biggest contributors to their emissions profile.
- The Supply Chain Transparency Solution supports supplier data collection for Scope 3 emissions calculations. It also allows businesses to monitor their supply chain for the labor and human rights violations that the CSRD, Uyghur Forced Labor Prevention Act, German Supply Chain Law and similar regulations seek to eliminate.
- Through Sphera’s Sustainability Consulting Services, companies can access decades of acquired methodological and sector expertise to build their climate strategy, prepare for ESG reporting and achieve the sustainability progress that stakeholders are looking for.
Sustainability is a driving force in a quickly evolving regulatory environment, and it will be for the foreseeable future. The insights gained through data collection and impact assessments can change an enterprise for the better.
Led by our mission to create a safer, more sustainable and productive world, Sphera is fully focused on helping companies manage their compliance obligations while simultaneously strengthening their business for the future. A sustainability focus is essential for organizations to succeed in both areas. Contact us to learn how we can help.
–Paul
Learn more about Paul Marushka.
