The Importance of data as an ESG tool and catalyst for good

Human interaction with the planet has caused many problems, including the degradation of biodiversity and the rapid onset of a planetary climate change emergency. Unless public and private sectors across the globe understand the associated risks and move toward a low carbon and sustainable way of operating, we will continue to see a breakdown of key sectors, economies and society. In line with the changes being experienced on a global scale, data has become central to most aspects of life and it has a role to play in the execution of an Environmental, Social and Governance (ESG) strategy. Data has been integrated into the decision-making process of many governments and organisations globally, with African nations slowly adopting the use of data as well.

ESG traces its roots to January 2004, when former UN Secretary General Kofi Annan wrote to over 50 CEOs of major financial institutions, inviting them to participate in a joint initiative under the auspices of the UN Global Compact, with the support of the International Finance Corporation (IFC) and the Swiss Government. The initiative was aimed at finding ways to integrate ESG into capital markets. A year later, this initiative produced a report entitled “Who Cares Wins”. The report postulated that embedding environmental, social and governance factors in capital markets makes good business sense and leads to more sustainable markets and better outcomes for societies.

The data revolution for sustainable development, according to the Counting on the World to Act report, is fundamentally about using new frontier technologies to produce data, conduct analysis, generate insight and disseminate results that might support progress to a much more sustainable future. With only nine years left to meet the Sustainable Development Goals (SDGs), it is imperative that we focus on building robust, inclusive, and relevant national data systems to support the curation and promotion of better data for sustainable development.

At the Global Voice Group (GVG), we have ascertained the importance of ESG investment. Our work with African governments and regulators has shown us that we have a role to play in using our ability to analyse data to assist them in providing sustainable governance. Sustainable governance must be at the heart of our ESG agenda and the solutions we promote as a company are key to driving that agenda, with data being a central factor. A truly sustainable company will push itself to change people’s lives and really put their revenues to good use.

The 2030 Agenda for Sustainable Development adopted by all United Nations Member States in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now and into the future. At its heart are the 17 SDGs, which are an urgent call for action by all countries in a global partnership. It is critical that every country and business worldwide plays a part in working towards achieving these goals by 2030, but in Africa the need is even more dire.

While Africa has contributed least to global emissions – just two to three percent, it is the most vulnerable continent to climate change. According to the UN Adaption Gap report, published in January 2021, communities in Africa cannot afford the goods and services they need to buffer against the worst impacts of climate change. The message for the continent is clear – that efforts to drive adaption must align with accelerating socioeconomic growth to build resistant populations. And this is where ESG investing comes in.

It’s absolutely clear that all companies should be looking at their business through an ESG lens, if they are not already. The messages for companies involved in collecting and reporting on data, is that their work can be used to support ESG initiatives and be a force for good. Without timely, relevant, and disaggregated data, policymakers and their development partners will be unprepared to turn their promises into reality for communities worldwide. A 2018 UN survey found that in Africa and Asia, on average, data for only 20 per cent of SDG indicators is currently available, and the World Bank 2019 survey has found only 35 per cent of the African continent has poverty data collected since 2015.

The coronavirus pandemic has intensified discussions about the interconnectedness of sustainability and the financial system. With data becoming one of the most valuable assets in today’s world, it is imperative that Africa realizes the importance of its data. GVG has worked with many countries in Africa to monitor and analyse data that has helped countries better manage revenue leakage, create transparency with mobile monetary platforms and help map Covid statistical issues.

To fully understand a problem, we must have research to map out the baseline of the current situation. There is the old adage, if you can’t measure it, you can’t change it and if we don’t know the true situation at ground level, we won’t be able to make sustainable change. It’s becoming clear that data is going to be a very critical tool for African governments and regulators to use on the path to helping prevent further climate change and subsequent breakdown in local economies and societies across the continent.

The writer, James Claude, is the CEO of Global Voice Group (GVG).