What’s New in Tokyo for Environmental, Social, and Governance Management (ESGM)

[ServiceNow]

We are excited to announce several new capabilities for Environmental, Social, and Governance Management (ESGM) in the Tokyo release.  

Companies are facing growing disclosure requirements from investors, customers and, increasingly, regulators. Corporate ESG and Sustainability teams are struggling to meet this overwhelming demand for ESG reporting and are looking for help to organize and automate their manual efforts. To help meet their needs, ServiceNow released its ESG Management product in November 2021. ESG Management integrates climate impact, risk and strategy within an engaging employee experience to support effective sustainability and ESG planning, management, and reporting. More specifically, ESG Management helps companies collect, organize, audit, and report their ESG data to their stakeholders.  

Using ESG Management and its new powerful features allows companies to handle the growing amount of ESG work. ESG Management handles all types of ESG data in one easy-to-navigate system – from carbon emissions to workforce diversity statistics, to statements on corporate governance policies. With ServiceNow, customers can take advantage of the platform’s flexibility and ability to integrate with multiple other systems of record, such as procurement and HR systems, to automatically pull in ESG-related data into the ESG Management tool. 

Carbon accounting 

Our first key capability is carbon accounting, which is usually an essential part of our customers’ ESG programs. You have likely heard the term “carbon footprint” – it means the amount of greenhouse gases released to the atmosphere from corporate operations and supply chains. Most ESG-related investor and customer inquiries, as well as reporting regulations, are focused on carbon emissions. Carbon emission calculations can get complicated but essentially consist of multiplying energy consumption by specific “emission factors”, which depend on the type of energy consumed (e.g. natural gas, petroleum, grid electricity, renewable electricity).  

Without carbon emission calculation software, corporate sustainability teams have to employ a set of manual tools and spreadsheets, which can result in errors, inefficiency and frustration. Our ESG Management product helps automate these calculations and make them more repeatable and auditable by allowing users to easily associate backup evidence (like utility bills) to the metrics on which the calculations are based. This auditability is increasingly important as more ESG regulations and investor-facing ESG ratings and rankings require external assurance of carbon footprint disclosures. 

A revamped user experience 

Carbon accounting is part of a larger challenge of collecting and managing hundreds of ESG data points from across the company. As ESG reporting expectations grow, the collection and certification of ESG data involves larger numbers of data contributors and approvers, and our new spreadsheet-style data collection user interface makes the work easier and more enjoyable for all these contributors. 

Without software like ESG Management, ESG data collection typically happens via email and spreadsheets – tools with which everybody is comfortable and familiar. The ESG program managers, who are responsible for the ESG reporting, spend a lot of time chasing the data contributors, asking and reminding them to provide information. In addition, as ESG reports become more visible and scrutinized, data must be validated by supplying evidence and obtaining senior management approvals to ensure that the data meet internal and external audit requirements. In reality, data is sometimes provided without evidence, email trails get lost when people leave the organization, and ESG program managers end up having to track down scattered calculations, documents, and just accepting the data and evidence gaps that they cannot fill.  

Introducing an ESG data collection and management tool like ESG Management can help but still presents some challenges. In most of these tools, the data collection typically happens through individual tasks presented to each data owner. Data owners and approvers must navigate across multiple tasks to provide the data and then to approve the data – a lot of copying and pasting and context-switching, which becomes cumbersome and potentially causes errors. In addition, if the user experience for data providers and approvers isn’t easy, they can simply refuse to use the ESG software to submit their data, leaving the ESG program manager in their prior situation of managing multiple spreadsheets and emails from data providers.  

To help solve these challenges, our new data collection user interface provides an intuitive and familiar way to enter data, as well as to attach evidence for establishing an audit trail. It gives senior management reviewers an easier way to approve the data. The table format minimizes context-switching, helping avoid inefficiency and errors. The table view is also customized for each user based on their role so that they can immediately see the metrics for which they are responsible – no scrolling through a long spreadsheet and clicking through tabs to find the relevant empty cells. 

The benefit to the ESG program manager is that the data contributors and approvers are more likely to accept and actually use the ESG Management tool, which helps the entire ESG reporting process run more smoothly. 

Key Takeaways  

ESG Management can help companies keep up with increasing ESG transparency and reporting demands. Our new features allow companies to efficiently collect, calculate, organize and report on the full scope of ESG information, including quantitative metrics and qualitative statements.  

ESGM is part of the broader ESG offering including the ESG Command Center. The ESG Command Center combines ESGM, Integrated Risk Management (IRM), and Strategic Portfolio Management (SPM). The ESG offering also includes a suite of solutions from the ServiceNow® product portfolio, such as IT Asset Management (ITAM) for e-waste management, and Vendor Risk Management (VRM) for managing sustainability in the supply chain.  

We encourage you to learn more by joining the “What’s New for ESG in Tokyo” webinar on October 11th at 8am Pacific Time.  

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