Use your accounting and ERP software to track and optimize your ESG metrics
What’s the best way to maximize your company’s positive impact on the world in areas like environmental sustainability, ethics, and thriving local communities? It’s to define, measure, and assess your company’s ESG standards just as you do your financial performance.
By adding concrete metrics to indicate performance around your values, you can track what’s working and assess opportunities to keep improving your positive impacts and reducing your negative impacts. You can also better attract and retain good employees, and increase your competitiveness, by communicating how you’re meeting these ESG standards and enhancing the total value that you offer.
Think of it this way. As consumers, we know that organic produce is displayed separately from non-organics in grocery stores and can appeal to shoppers. This is likely due to the trust in quality and potential benefits these products have on our health, enjoyment of quality and flavor, and reduced negative impacts on the environment. When a product is labeled as organic, that means it meets the standards set by the U.S. Department of Agriculture; the higher quality makes the product more valuable.
What is ESG?
Environmental, Social and Corporate Governance. Three subjects that define a company’s standards and values in how the company wants to positively impact the world—over and above their financial impacts.
It’s the same for your company. Many customers are shopping for trusted, high-quality, ethical products and services, and are more likely to purchase from companies who share their values and can communicate concrete, measurable standards that prove that quality.
Measuring ESG standards comes down to tracking internal and external Environmental, Social, and Corporate Governance standards in your business.
- Environmental practices start with managing resources to increase renewal and recovery, and reduce waste. An example your company could practice is to measure your energy consumption. Then outline ways to reduce it and reassess the metrics, finding what works best and optimizing over time.
- Social practices start with managing how well people are treated. For example, your company could focus on corporate culture, and establish metrics (such as employee job satisfaction surveys) to assess the effectiveness of your hierarchical and cross-departmental communications.
- Governance practices start with managing equitable treatment of stakeholders, and adherence to applicable regulations. One example is to define your standards for pay versus performance for employees, suppliers and vendors. Then make routine assessments, audits, and adjustments to enforce your standards.
In today’s world, ESG impacts have become important not just in consumer and non-profit areas, but in the business world, too.
Integrating ESG standards and values into your business can improve company morale and overall functionality.
You can use automation to help you as you standardize processes, measure them, ensure things are held to your standards, and share and communicate improvements.
AIS has over 30 years of focus on businesses who want to use accounting and ERP software to automate the measurement of these intangible ESG assets. Our specialty is to help you continuously improve operations for easy accountability across the board—from financial accounting, to quality management accounting, to Environmental, Social and Corporate Governance accounting—all in a single, flexible accounting and ERP system. See our ESG Enterprises information.