The role of ERP in ESG performance reporting
By Jaco Maritz, Chief Executive Officer, SYSPRO In a manufacturing business, measuring ESG standards comes down to tracking internal and external Environmental, Social and Corporate Governance standards. ESG has become a determining factor in access to capital and in the decisions made by consumers and B2B customers. So, it’s not surprising that leaders are taking ESG seriously. EY’s 2022 CEO Outlook indicates that 97 per cent of CEOs say their company has a sustainability strategy. What’s more, 28 per cent believe they will gain valuable competitive advantage by becoming leaders in sustainability. However, before CIOs, CFOs and boards consider technology investment, they should be fully aware of the growing role of ESG in reporting and in boosting corporate performance. As corporate strategy rapidly incorporates ESG, digital strategies must align accordingly. For example, a manufacturing company may commit to improvements in water usage in production processes, carbon emissions, the proportion of its products that are recyclable, and wages and working conditions of employees and contractors. Without a technology strategy that supports the collection of high-quality data along the entire value chain, companies will not be able to report data or demonstrate progress against these commitments. ESG in the supply chain Supply chain sustainability shifts the focus from short-term financial considerations to long-term value creation as well as managing the ESG performance of suppliers. By taking these factors into account, sustainable supply chain management not only benefits the environment but also reduces risks, mitigates impacts and realises reputational and financial benefits such as cost savings, brand goodwill and customer loyalty. Companies with strong ESG performance typically have robust governance frameworks, manage social and environmental risks well and have stronger relationships with suppliers. Prioritising supply chain sustainability can reduce general risks for corporations, including minimising operational disruptions caused by environmental and regulatory risks […]