Reports > Management

ESG Data Power: Beyond Compliance, Creating New Opportunities

2023.10.18 Hyeon-ju Yoo

Hyeon-ju Yoo

#Hashtag

#business model #case study #ESG #KPI #risk management #sustainability
There is a tendency to perceive ESG data as data related to ESG disclosure and evaluation. The scope of the data is typically defined by the purpose of conventional usage. However, ESG data contains a much broader and diverse range of potential applications. This is because it encompasses all information related to the impact of a company's business activities on the environment and society and the influence of socio-environmental changes on business performance. Therefore, by introducing examples of how companies are leveraging ESG data to create influence in the market and with stakeholders, this report aims to provide companies with insights into the direction of ESG data management and utilization.
Table of Contents

  • 1. Introduction

  • 2. Power of ESG Data

    • (1) Signifying Business Sustainability

    • (2) Becoming the Core of Business Models

    • (3) Driving Behavioral Changes of Stakeholders

  • 3. Implications

Executive Summary

  • ESG data encompasses all information related to the 'impact of business activities on the socio-environmental sphere' and 'socio-environmental changes influencing business performance.'

  • Practitioners typically define the scope of ESG data management based on information demanded by global ESG disclosure and evaluation initiatives, often approaching it from a compliance perspective.

  • However, a compliance-centric approach may undervalue the opportunistic aspects of ESG data. Therefore, it is crucial to recognize the diverse possibilities inherent in ESG data and adopt a multi-faceted approach.

  • [Power of ESG Data ①] Enhancing Business Sustainability

    • Telefónica's "Responsibility by Design" outlines the purpose of development of new products and services, specific principles and values of sustainability of the process, and management governance.

    • Walmart's "THESIS" visualizes potential ESG risks for business, deriving potential risks from product lifecycle and categorizing relevant data into KPIs.

  • [Power of ESG Data ②] Core Role in Business Models

    • Integrated digital platform services that manage various ESG data and support collaboration in relevant practical processes are emerging as a new business model.

    • BASF and Sherwin-Williams adopt sustainability-related data as product evaluation criteria, aiming to make their business portfolios more appealing for customers.

  • [Power of ESG Data ③] Driving Behavioral Changes of Stakeholders

    • Walmart provides a digital platform that supports voluntary carbon emission reductions in its supply chain and induces the supply chain’s carbon emission reductions by recording and sharing carbon data.

    • BASF, through the 'Supplier CO2 Management Program,' collects upstream Scope3 measurement data and induces behavioral changes of suppliers by taking a series of systematic measures, including adjusting purchasing decision criteria with such data.

  • Therefore, by going beyond mere compliance and approaching ESG data from the perspective of creating new opportunities, companies can strengthen their competitiveness in the market while evolving into influential entities within the market and among stakeholders.

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