Companies worldwide have come to view their environmental, social and governance (ESG) programs as a business imperative with real impact on stakeholder trust and long-term value creation. But as every CFO knows, you can’t manage what you don’t measure.
ESG has skyrocketed up the list of business priorities over the past two years due to the pandemic, social unrest, stricter regulatory environments, and the increasingly obvious effects of climate change. Yet ESG measurement and reporting are relatively new disciplines. Leaders have had to figure them out quickly and hold themselves accountable for their progress.
Here’s the good news: Strong ESG performance yields compelling business benefits. ESG connects to business strategy in a way that is good for the planet, good for people, and good for profits. As the chief financial officer of ServiceNow, my mission is to ensure ESG underpins every part of our strategy, culture, and decision-making framework.
To understand how organizations are defining and meeting their ESG goals, ServiceNow and ThoughtLab recently conducted a global survey of 1,000 global C-level executives working in five industry sectors across 12 countries. Company sizes ranged from $350 million to more than $5 billion in annual revenue.
We sorted the survey respondents into three ESG maturity stages: beginners, intermediates, and leaders. We used 11 criteria to define these stages, from having an ESG strategy to incorporating ESG goals into their digital transformation efforts. This approach helped us identify the best practices of ESG leaders, along with the performance returns achieved by moving to the next stage of maturity. The number one benefit for ESG leaders is, remarkably, increased revenue growth. Leaders say their boards and the C-suite are making ESG a top priority and that digital innovation is intrinsically linked to progress on ESG goals. They also report that ESG strategies and vision are key to attracting and retaining talent, customers, and shareholders.
(Results from the ESG survey are highlighted throughout Quarterly.)
The right ESG strategy can mitigate business risk and deliver competitive advantage. It can also build trust, the ultimate human currency. That’s why we packed the Spring issue of Workflow Quarterly with insights to help business leaders optimize their ESG efforts. This is a journey without a destination, but a strong ESG structure can help companies solve some of the world’s greatest challenges.