Today’s stakeholders have more questions than ever for corporate boards about “doing well and doing good.” Does the company’s environmental record align with current regulations and sustainability best practices? Are any red flags looming in terms of supply chain management or worker health and safety? How do the board’s composition and governance practices compare with peers?
To answer effectively, boards need access to the same data their investors have — and they need to make sure they’re not missing anything in terms of their company’s leadership, business practices, and overall governance.
Yet, in a recent research report by Forrester and Diligent, governance professionals indicated that “visibility into sustainability and ESG issues” was their greatest dissatisfaction.
This is where automation comes in — helping governance professionals map trends, streamline data searches and more. It can empower boards to expand their visibility, extend their analytic reach, and stay ahead in today’s era of stakeholder capitalism.
Freeing Up Time and Resources
With over 2,000 laws, regulations, and policies worldwide right now related to climate, it’s easy for boards and governance professionals to feel like they can’t keep up — and they won’t if they continue to rely on manual processes for ESG data entry, charts, reporting and other time-consuming tasks.
Automation is a powerful tool for getting the right information to the right people at the right time — faster and with less effort.
Let’s consider the “E” in ESG first. Think about the time and labor involved in monitoring compliance performance across jurisdictions and business functions. Now imagine a platform that automatically tracks obligations and recommends corrective action, with predictive modeling for mapping compliance to corporate strategy.
Now let’s examine the “G.” How does your organization rank on important governance metrics, and where might investors see red flags? Modern governance solutions can automate this benchmarking as well. Diligent delivers a Governance Health Score & Assessment that’s based on 13 attributes of board effectiveness, saving governance teams weeks of research and analysis.
Finally, automated processes and workflows help boards work more efficiently to dedicate more time and brainpower to the factors driving ESG performance. As EY CEO Carmine Di Sibio said in a recent Diligent webinar, “Metrics are just outcomes […] What you really have to think about, first of all, is what’s your [long-term] strategy as an organization?”
Teresa Cleary has seen the power of automation work towards such ends. She advises ASX-listed Elixinol Global Limited, a company growing across multiple jurisdictions, on modern governance and recently shared with Diligent how the board has used automated collaboration controls to increase efficiency and deliver a reliable decision-making workflow.
“It has transformed how we run board meetings, and with a seamless, natural process we are now focusing on the issues we should be focusing on — not on what page we should be referring to,” Cleary said.
Tracking Peers and Progress More Efficiently
Boards need to know how they stack up against competitors and peers, but often this information is challenging to compile and parse for meaning. Automation-powered analytics make it easier, faster, and less labor-intensive to compare and contrast internal organizational data against any number of external benchmarks.
A solution that generates an automated “enterprise health score,” for example, can pull data from across the organization based on pre-defined ESG metrics. Boards receive a quick, consolidated view of a company’s impact — including red flags and comparisons against peers and competitors.
Monitoring the Landscape More Effectively
In a sea of data, which trends and topics matter most?
Automation helps boards keep a finger on the pulse of stakeholder sentiment. AI-powered news tracking shifts through thousands of sources in a fraction of the time humans would need to collate the same information. With this automated process, boards can efficiently curate news, public filings and regulatory updates based on a specific set of company criteria.
Automation also powers functions like sentiment analysis, which parses language from written text such as blogs, social media posts, articles and online reviews. By analyzing the feeling behind the words, sentiment analysis helps boards understand the ESG concerns investors and other stakeholders want them to address along with accolades for positive impacts, so they can help their companies achieve a more strategic position for the future.
Optimizing ESG Reporting
Finally, through streamlining everything from document creation to in-depth analyses, automation can help boards standardize and optimize ESG reporting, a critical capability as ESG issues steadily consume more room on boardroom agendas and stakeholder priority lists.
For internal reviews, automation can help boards more quickly and easily factor regulatory changes, investor updates, emerging trends and activist sentiments into internal templates, dashboards, and meeting materials. This sharpens decision-making while also lessening the burden on governance and compliance teams.
Outside of the boardroom, investor teams want to see intentionality, improvements, and informed answers to ESG questions. Franklin Templeton President and CEO Jenny Johnson said at a recent Diligent webinar: “Show me you’ve made these kind of improvements and that there is an evolution happening here.”
Automation makes it easier for boards to create external reports of ESG plans, benchmarks, activities, and progress with intuitive visualizations. Furthermore, automation aids teams in catching errors, conflicts, and misalignments before they become larger problems.
As ESG continues to play a growing role in a company’s reputation, revenues and competitive edge. Automation will help forward-looking boards to work more efficiently, see more, and make faster, smarter oversight decisions.
Learn More About Diligent’s ESG Solutions
Learn how Diligent’s ESG solutions are helping companies operationalize ESG principles, track progress against standards, and monitor stakeholder sentiment.