The Environmental, Social, and Governance (ESG) are three important factors for measuring the ethics, sustainability and social impact of a company. ESG factors play a vital role in calculating long-term risks and ROI of a company.
What is an ESG score?
An ESG score is a measure used for evaluating the performance of a company in terms of environmental, social, and governance aspects. It is also based on how a company is performing, how it treats its employees and stakeholders, and how committed it is to ethical and transparent practices. Most organizations use ESG scores to access and understand their performance internally.
ESG scores are used by investors as well as financial analysts to assess the long-term sustainability and financial health of a company. ESG scores help investors make investment decisions to achieve better financial returns.
Why is ESG Score Important?
An ESG score helps build a corporate reputation for an organization. A company is assessed on a variety of metrics from each of the three key categories of environmental, social, and governance to determine its ESG score.
- Environmental – Environmental factors in ESG refer to an organization's impact on climate change. The company is evaluated on its use of renewable resources, carbon footprints, resource depletion, and its commitment to reducing waste of natural resources and pollution management practices.
- Social – Social metrics are about the labor practices of a company. This includes evaluating how the company treats its employees, their workplace safety, health, involvement in the local community, and fostering diversity and inclusion in the workplace regardless of gender, or age.
- Governance – Governance focuses on the company's metrics such as, executive renumeration, corporate policy, board of directors pay, donations, tax strategy, corruption, and diversity. The company is also evaluated on their sustainability goals related to the top management’s behavior in ethics and compliance.
ServiceNow and its Role in ESG Management
ESG plays a vital role in understanding the situation of a company, both for investors and the organization itself. Understanding ESG and related aspects to manage it properly is essential for every business. ServiceNow’s ESG management application has been helping businesses to centrally manage all their ESG commitments as well as providing progress reports for their ESG initiatives.
Organizations are required to report how their ESG commitments are integrated with their business strategies. These initiatives can be:
- Reduced carbon emission
- Waste reduction
- Diversity at work
ServiceNow's ESG Management Overview
Many organizations that engage with ESG often lack a centralized tool that can help them manage their ESG initiatives. Without a proper tool, it can be difficult to track ESG efforts and progress. However, with ServiceNow's ESG management tool, it all can be made easy. This application allows organizations to manage their ESG programs to move ahead with their ESG goals. This application also provides ESG reporting to help improve the company's reputation and gain consumer confidence. This allows companies to analyze the risks and opportunities and stay transparent as well.
With ServiceNow's ESG management application companies can:
- Establish disclosures for both internal and external stakeholders
- Streamline data collection both automatically and manually by establishing benchmarks for the ESG program across the organization to enhance reliability and audit readiness.
- Establish an ESG program with all crucial subjects, goals, actions, sustainability topics, disclosures, and emission factors and view current and complete ESG story altogether.
- Monitor performance by facilitating regular monitoring and progress against organization’s ESG goals.
- Simplify ESG data validation and visualization for accurate, efficient and timely reporting.
Benefits of ESG Management Application
Managing and reporting your ESG with ServiceNow’s ESG management application can have plenty of benefits, including:
- Enhancing your brand reputation
- Giving your company a competitive edge
- Attracting more investors
- Allowing your business to adhere to regulatory requirements
- Establishes a strong corporate governance via ethical and transparent business practices.
Features of ESG Management Application
Executive Dashboard
This feature of ServiceNow's ESG management application allows organizations to see the entire ESG program including the material topics, goals, targets, objectives, and disclosure, all at a centralized location.
Data Collection
This feature allows companies to gather, compute, and keep track of quantitative and qualitative data on ESG issues.
Status Checks
Organizations can check their ESG goals, objectives, and accomplishments easily using a single source.
Automated Disclosure
This feature allows companies to stay up to date with streamlines reporting against regulations such as Sustainability Accounting Standards Board (SASB), Task Force on Climate-Related Financial Disclosures (TCFD), and Corporate Sustainability Reporting Directive (CSRD).
Stay tuned to learn more about ESG Management with ServiceNow.
