Insights from ESG leaders: using data to quickly drive ESG materiality analysis
At GreenBiz23 Datamaran spoke with Nate Shepley Streed, Senior Global Director of Sustainability & ESG at Vontier, a global industrial technology company focused on smarter transportation and mobility.
See the full video here, or focus on key points of interest in the links below.
How has ESG evolved in recent years?
“Since I started my professional career in sustainability in 2011, I've seen a remarkable change in the depth and breadth of topics that we're tackling. Not just the basic understanding of sustainability, but what are the sub-tenets? What kind of goals should progressive companies take? It's really quite remarkable in 2023 to see how it's really grown and expanded.”
What is the primary motivation for focusing on ESG?
“I think the primary motivation for companies, and certainly for Vontier, is stakeholders, everyone from investors, communities, and your employees. It's really individuals at large that are hungry and interested to know how your company is trying to make a positive impact in the world.”
What advice would you give to companies only now starting with ESG?
“The first step is materiality, getting a basic understanding of what's important and to whom.
I think the best process and understanding materiality is through Datamaran, I really do mean that. The fact that it is really just a simple x and y plotting of the critical topics to internal and external stakeholders, it simplifies and helps understand what are those critical impact categories. For lack of better words, I sometimes say ‘What are the things you can't not do, to be seen as credible in sustainability and ESG?’”
How do you determine a short-term ESG risk versus a long-term risk or opportunity?
“At Vontier we look at risks and opportunities based upon emerging trends over a quarter or two quarters versus a year. If we're seeing a topic that continues to increase in importance we ask ‘Do we have a policy or position and initiative in that space?’, as well as identifying what might be short-term, interesting areas that we need to take note of as an organization. We really want to be able to say that we have a point of view on that and continue to monitor and track it, to see how that topic plays out in the quarter or year to come.”
How would you assess ESG risks and opportunities before Datamaran?
“Before using Datamaran, at another organization, we completed some materiality assessments that probably weren't as robust. You don’t have access to the internal AI, you're not comparing against peer companies. So it is getting a rough idea from internal and external stakeholders, but it's certainly not the same depth and breadth. Sometimes that snapshot doesn't give you the long-term understanding of that topic.”
Who can benefit from materiality assessment insights?
“Identifying emerging issues through materiality assessments is really helpful for a variety of stakeholders. Certainly internally, whether we're looking at sustainability, ESG, or governance, our HR team, certainly our C suite, and even our board. Understanding these are the types of topics that continue to arise in their level of importance and we want to make sure that we have a really robust understanding of the topic and how our company is addressing it, and improving in those spaces.”
What are the pitfalls of not staying ahead of ESG issues?
“I think the greatest challenge if you're not tracking these, is that if there's a topic that continues to increase in importance, you're going to be on the back foot, and then you're going to be constantly scrambling and figuring out how to address this in a really fast fashion. I really think that based on the level of interest and the importance of it, it requires time and space to think through it strategically versus a retroactive quick fix.”
How has technology influenced how you managed ESG?
“What I appreciate about Datamaran and having that quarterly cadence is it gets people to understand that this is an activity that we are continuing, we're going to continually repeat it every quarter. And so it gets people thinking about how is materiality continually being looked at every quarter, whether it's at our C-suite conversations and ESG working group, even at a board level.”
How important is it to understand peers and stakeholders?
“Looking at our peers, looking at regulators, it's all important, but getting into that level of detail and understanding of who's talking, what are they talking about, how they are addressing it - without having a tool it becomes really a tedious activity, something that could take weeks, to really understand. By having Datamaran, we get that quick snapshot, and we can dig deeper into those topics as appropriate.”
How important is working cross-functionally for a successful approach to ESG?
“At Vontier, we really work cross-functionally in the sustainability, ESG space, we are a small but mighty team. So we really do need to have those connections to other departments to really be effective and drive those critical topics into real activities that we can see progress against in real-time.”
Is the ESG team influencing corporate strategy?
“I'd say it's early days, but the sustainability and ESG team at Vontier’s really integrate into the business. We communicate through our Chief General Counsel up to our board. Having that level of exposure has been really important to say ‘What are the types of topics we need to be aware of?’ and ‘How do we start tracking this and building it into the business?’ We've been really intentional that this is an integral part of the organization, it's not bolted on at the end, and it's been really helpful.”
How has the increased focus on governance by regulators impacted you?
“We're building processes very carefully. I think it really is a wide stakeholder consultation and how we build the programs, and the goals, and that it's really multi-stakeholder input."
"Datamaran has the ability to provide that insight to help bring the outside in and help us understand what good looks like, and then how we get informed policies with other key stakeholders internally.”
Do you focus on the ESG issues that matter or try to manage them all?
“I think there can be the challenge, or the thinking, that we need to do everything. What I love is that high value targeting. What’s those three to five critical topics that we really want to drive and be a leader in. I think having Datamaran helps us identify and track those key topics and really helps focus energy and make sure that we're making progress in the most critical topics.”
How are you avoiding Greenwashing?
“When we talk about greenwashing, I think what's really, served me personally in this space, is just sharing with your stakeholders what you are really proud of. What are we doing well, right now, that we would love to share with our different stakeholders, and what do we really challenge? I think more and more, whether it's customers, suppliers, or employees, people expect you to be honest and not perfect. Having that level of humility, and bringing people on the journey helps avoid greenwashing. It's not always going to be buttoned up and perfect, but we all can learn by just sharing where we're at.”
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