Organisations are well aware of the urgency to act on the sustainability agenda, with a strong desire to positively impact the world around them and for consumers, employees, and shareholders. However, one of the greatest challenges for organisations starting out, or even many months and years into their sustainability journey, is a need for a greater focus on data, which prevents them from achieving their goals and having the impact they seek.

Why a data-driven approach is so critical

To define meaningful areas of action on sustainability – in your context

Sustainability encompasses many topics and issues. Organisations select different frameworks and approaches (SBTi, UN Sustainable Development Goals, ESG, People/Profit/Planet etc.)  to frame their strategies, each with a unique definition of what operating sustainably will mean.

To make any discussion of sustainability meaningful and avoid accusations of making empty promises, there has to be something precise, objective, and clear about what is at stake and where the company is seeking to act. This relies on data to identify areas and magnitude of impact.

To set meaningful sustainability targets, prioritise, and guide action

Turning goals into action means breaking such high-level goals into practical, deliverable targets with agreed metrics for what constitutes a “sustainable choice”. That allows judicious use of resources – for example, should we spend our time on our packaging, transport, manufacturing operations, or something else, to reach our goals?

But also, on a topic which is evolving in an ever-changing environment, it ensures solutions are working towards the desired effect. For example, recently, LEGO decided to discontinue its initiative to replace oil-based plastics in its bricks with recycled plastic, as the new material resulted in increased carbon emissions – which would have been impossible without a strong data grounding.

This means being explicit about what areas you are trying to impact and what the measure will be. Setting clear goals that outline what success looks like is crucial. They should be SMART and based on objective criteria to avoid the pitfalls of greenwashing or exaggerating your impact, or harming other business needs (sustainability, or core traditional business metrics). This requires deep control of data, both determining what to measure, setting stretching targets, and routing their measurement and reporting.

To ensure goals will be achieved

Only by having affirmed a baseline as a reference point will it be possible to measure your efforts accurately. Once the target has been set, it is essential to continually assess your progress against this baseline to determine if you are on track to achieve your objectives. It is not always obvious, but interim targets, aligned with formal review points, are needed to check progress vs the desired glide path and allow for course correction.

Key get rights in establishing your data-driven approach

Many companies strive to implement a data-oriented sustainability programme but face common hurdles.

Availability / quality of data

Sustainability indicators represent bringing in data attributes that have not previously been required. This can challenge existing data structures, as well as meaning there are gaps in what is already available (if never having been collected before) or have issues being available at the necessary granularity, particularly when it involves information provided by third parties. As everyone is gathering and using this data in new ways, issues with quality, gaps, or reliance on imprecise assumptions are common.

However, this must not stop businesses from acting – working with existing data and collaborating with key stakeholders to address quality issues and gaps, co-developing assumptions, which will ultimately continually iterate and improve over time. Put in place the structure and tools needed to support your activities and ensure alignment with (the evolving) industry standards to futureproof your sustainability strategy.

Embedding sustainability data into operational activities

Many organisations already struggle to master their scorecards today, and the sustainability challenge adds a whole new set of concerns and topics to keep in balance. For example, measuring concepts like circularity and integrating them into databases and operational processes requires subject matter expertise and a review of overall metrics design and decision-making and trade-offs.

Businesses need to grasp the nettle and include sustainability indicators in the same management routines and other strategic decisions as soon as possible to increase familiarity and establish this as part of BAU. Additionally, sustainability indicators should be introduced as personal and team incentives and objectives to reinforce accountability for delivering against these goals.

Data mindset and literacy

A lack of core capabilities harnessing data to focus human activities on more value-adding tasks is commonplace, and the sustainability agenda merely adds another reason to a long list for addressing this critical competency gap. While working on people capabilities, review the infrastructure in the organisation to simplify the use of data for sustainability purposes – including visualisation, operational decision-making, status reporting, or audit and disclosures. Provide training programmes for employees to ensure they understand their role in using and stewarding data to drive real impact.

To a data-driven future

The challenge of realising a more sustainable business while delivering against core business needs is clear – how to do more and create new value and service propositions, while reducing impact on the planet and acting as good corporate citizens. Only with data can you understand where you need to act, quantify the different options, and decide what action to take which has the most positive impact across the range of business concerns. Bringing data for sustainability alongside operational practices is essential because, ultimately, it is not about sustainability vs ‘traditional’ business decisions – they are the same.

Author: Judith Richardson

Nick Miller

Associate Partner

[email protected]

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