The rise of technological innovations that enable real-time data collection and reporting, new methods of communication and number-crunching is set to transform the world of corporate social responsibility, says CSR Asia’s Inna Amesheva.
By Inna Amesheva - August 28th 2017 - View the original article here
Corporate sustainability practices and reporting will be radically transformed in this era of rapid digital and technological change. Technological advances and increasing demand for real-time updates are going to bring a number of transformations in the way sustainability is monitored, implemented and reported.
Companies currently spend a lot of time, effort and resources to prepare Corporate Social Responsibility (CSR) reports, but how many are actually read? Without integration of CSR into business processes, and without CSR reports bringing tangible value, this annual exercise becomes a drain on company resources. Emerging technologies can help make reporting easier. They can also address the main data challenges of reporting, including:
- Information is dispersed throughout different business segments
- Insufficient quantitative information or metrics
- Information is unavailable due to inadequate record-keeping
- Low integration between processes and databases
Many companies still carry out cumbersome manual data collection, compilation and reporting procedures. This is time inefficient, involves a large amount of effort and can lead to poor quality findings or inaccuracies. A number of immediate improvements can result from the adoption of a technologically-enhanced CSR reporting approach. Here are five key technology trends that sustainability practitioners need to be aware of.
1. Real-time data equals real-time stakeholder scrutiny
Ubiquitous access to network-connected mobile devices has made data more accessible and easier to gather, check, correlate and analyse. The extensive reach of technology into everyday life means that stakeholders now expect to be able to access information quickly and conveniently.
They demand that information be updated regularly and be easily verifiable with regard to its consistency and validity. Such ongoing public scrutiny requires that companies present coherent and reliable sustainability information at all times.
According to the Global Reporting Initiative (GRI) ‘Sustainability and Reporting Trends in 2025’ Report, this will result in a new role for stakeholders, who will now have a more direct impact on the development of corporate governance and strategy. This can lead to greater stakeholder empowerment and involvement in corporate sustainability mechanisms.
New technologies now allow companies to collect real-time data and automate the data collection process. This foreshadows the demise of annual CSR reports – which are usually at least three months out of date by the time they are published. Indeed, we are already seeing a trend towards online reporting, more regular reporting and even sustainability dashboards with real-time data.
2. Non-traditional communication channels unlock opportunities to engage more stakeholders
The new ‘information age’ enables organisations and individuals alike to produce and disseminate their own data analyses and findings, through diverse media channels such as videos, interactive infographics, and virtual reality (VR), complementing more traditional reporting methods such as annual CSR reports. Virtual reality, for instance, is one innovative way to provide communities and different stakeholders with new ways to engage with and build awareness of sustainability issues.
These novel data distribution channels can reach many more people, in turn making sustainability findings more relatable and engaging, especially compared to conventional data presentation formats. Companies can leverage these different channels to disseminate sustainability information in ways that are more interesting and enjoyable for readers – which in turn could help businesses engage new and different audiences.
Brewing giant Heineken, for instance, launched an interactive sustainability report, called ‘Brewing a Better World’, in which key information was presented via GIFs. Italian construction group Salini Impregilo has included a number of interactive CSR KPIs on its website, while Waste Management, a Houston-based waste disposal company, reports its sustainability metrics via an online interactive sustainability report.
Another example is Hong Kong-based utility CLP, which features interactive charts tracking the company’s environmental, social and governance performance on its website.
3. Technology leads to more integrated sustainability practices
Technology can also act as an enabler for businesses to adopt a more coherent and integrated reporting framework. Through technology, companies are better placed to include detailed data on their supply chains and regional operations, providing a more comprehensive picture of their corporate sustainability and compliance.3 According to the GRI, this brings about the need to adopt a fresh view of management culture: “Data technology will enable companies to operate in an integrated way within and across sectors and regions, monitoring their impacts and supply chains, and acting together to tackle society’s and companies’ challenges.”
Technology can have a particularly transformative impact on supply chain management, making it possible for businesses and stakeholders to establish a more comprehensive understanding of the relationship between an organisation’s supply chain and its sustainability impact.
Some prominent examples of technology-enabled supply chain mapping include Patagonia’s Footprint Chronicles, which map and trace all the company’s mills, factories and farms, ensuring a seamless production network. Thread International is another initiative, powered by Sourcemap – a supply chain platform that allows brands and manufacturers to gain visibility into the end-to-end supplier network, so as to better assess performance and risk.
Technology-enabled integrated reporting allows businesses to explore and benefit from the interconnections between organisational strategy, governance and economic performance on the one hand, and the socio-environmental context of a company’s operations on the other.
Companies can leverage these different channels to disseminate sustainability information in ways that are more interesting and enjoyable for readers – which in turn could help businesses engage new and different audiences.
4. Big data will transform sustainability measurement
Big data-enabled dynamic, accessible and real-time CSR reporting is becoming the norm. Sustainability performance data can now be collected and analysed by technologies such as Blockchain, big data and artificial intelligence, allowing organisations and consumers alike to understand and find the correlations between what would otherwise be complex and unintelligible statistics.
Data technology can greatly facilitate the process of putting a price on impacts and externalities. This enables the creation of the right methodologies to more accurately assess and evaluate how externalities can be monetised. The growth of big data analytics facilitates ‘big picture’ sustainability reporting, providing useful tools to measure and analyse traditionally intangible ESG indicators in a more coherent and integrated manner.
Greater accessibility and processing power can also empower senior management, investors and other stakeholders to analyse ever larger amounts of data. This means that companies are going to be increasingly driven towards achieving improved consistency between their stated values and actions in practice.
5. Artificial intelligence can help drive sustainable business
The final and perhaps most elusive trend defining the future of corporate sustainability is the role of artificial intelligence (AI). This is because AI is often unprecedented and has a wide-ranging potential to transform multiple industries and business sectors. Indeed, the rate of technological innovation has frequently outpaced the ability of regulators to adjust and adapt to these new developments.
That said, AI and advanced technology tools are already available within the sustainability reporting space. One company, eRevalue, has developed an “AI tool that would provide fast, efficient and powerful business intelligence on large unstructured data sets from the global corporate reporting landscape.”
While innovations like these are yet to become mainstream, technology is certain to have a tangible impact on how businesses record, report and ultimately implement sustainability within their operations.
Join CSR Asia, GRI, CLP, CPA Australia at the CSR Asia Summit 2017 on 26 and 27 September in Bangkok, where we will discuss how companies can, and should, future-proof their CSR reporting.