Letters: Data-first green plans
[RE: ESG faces reckoning after being ‘hijacked’ by marketeers, EY sustainability chief warns]
ESG faces reputational risk, following several cases of marketers making unsubstantiated claims. But most organisations truly want to do good. The problem isn’t just deceptive markets, it’s companies lacking the data tools. It’s not hijacking, it’s inability.
Take third-party ESG ratings. One study shows correlation between the top five ESG data ratings agencies as 0.6. To contextualise, ice-cream consumption and shark attacks have a higher correlation; most companies are completely in the dark. Internal data is also complicated. For many public companies, the process of collecting ESG data is manual and tedious.
UK businesses must look at ESG through a data and AI lens – moving ESG data into one place and using data platforms that enable machine learning. Major cloud providers enable cheap storage of swathes of ESG data. Numerous data platforms enable companies to use ESG data in previously impossible ways.
Finally, open source software allows companies, regulators and environmental groups to come together, bringing transparency to data.
To actually do good, not just look good, companies must rethink how they use data.
Junta Nakai