- While executives remain committed to advancing environmental, social and governance initiatives, they’ve run into budgetary roadblocks, according to a Wednesday Google Cloud report. The Harris Poll surveyed nearly 1,500 business leaders in mid-January for the CSP’s second annual sustainability study.
- Lack of effective tools, a dearth of reliable data and ineffective governance have also slowed progress, according to the report. Nearly three-quarters of respondents want to move forward with sustainability efforts but are unsure of how to do so.
- “A lot of this comes down to measurement and data,” said Justin Keeble, managing director for global sustainability at Google Cloud, during a virtual briefing last week. “Executives don't have the insights at their fingertips when making business decisions.”
Public pressure, consumer preference and employee sentiment have helped move the needle on corporate ESG initiatives.
The prospect of impending Securities and Exchange Commission regulations, which would mandate annual emissions reporting, drove home the business implications of sustainability.
Most companies are talking about ESG, and 96% of respondents said their organizations have at least one sustainability program in place. Nearly 9 in 10 acknowledged that their customers prefer sustainable brands.
While enterprise IT spending is expected to grow steadily this year, high interest rates and persistent inflation have put a squeeze on budgets, leaving less money for projects that may not show an immediate return.
If ESG results can’t be easily measured, sustainability initiatives become hard to justify. More than three-quarters of respondents said they’ve had to contend with ESG funding cuts this year.
Lack of data can also have a counterproductive greenwashing effect, with companies overstating progress, underreporting emissions and risking an erosion of public trust. Nearly 3 in 5 respondents admitted to inaccurately representing their sustainability activities.
“Technology innovation and sustainable operations and services were the number one and number two investments that executives believe will move their organizations in a sustainable way,” Chris Talbott, Google Cloud sustainability lead, said during the briefing.
Green aspirations have helped drive enterprise cloud migration. AI-enabled technologies are another lever companies are using to push ESG forward, according to consulting firm Accenture.
“This is clearly going to be a cross-functional effort where teams are embedded across an organization with a central leader setting sustainability strategy and governance,” Keeble said.
ERPs are building out sustainability management capabilities and third-party vendors are developing other solutions, but it will take internal organizational changes for enterprises to fully realize the benefits of ESG.
“There’s no one way to tackle sustainability challenges,” said Keeble. “It can be difficult to get organizations aligned on priorities and moving in the same direction, and we see executives needing more leadership within their organizations to make decisions on where to focus for the biggest impact.”