Why a lack of data can derail your ESG goals

4 April 2022

Australian supply chain executives believe a lack of reliable data is preventing them from meeting their ESG targets, according to research.

High numbers of supply chain managers at Australian businesses wanted to improve ESG practices and reduce risk exposure, a survey by spend management software firm Coupa found.

Climate concerns came top of the list, with 92% of executives saying they wanted to reduce greenhouse gas emissions and 88% stating their desire to improve energy efficiency. A further 87% wanted to reduce deforestation.

Supply chain diversity was another priority, cited by 89% as an area they wanted to improve, while 80% expressed the desire to eliminate modern slavery.

As part of the research, Coupa surveyed 800 decision makers with an overview of, or responsibility for, the supply chain in businesses with more than 1,000 employees in Australia, France, Germany, Singapore, the UK and the US.

Coupa did not specify how many of the executives were Australia-based.

But the company said 94% of Australian respondents believed it was vital to have accurate ESG data of suppliers to understand supplier risk.

And 60% of Australian executives described data on suppliers’ ESG credentials as “somewhat” available or “not really” available.

A third (34%) of those surveyed in Australia believed they lacked strong enough technology capabilities to assess ESG risk and compliance.

Just over half (51%) of Australian businesses believed they could only assess ESG risk and compliance of tier one suppliers “to some degree”.

A further 10% believed they could not accurately assess that risk at all, while 54% could only assess risk for tier two suppliers “to some degree” or not at all.

To help them achieve ESG goals, 51% of Australian organisations were planning to invest in new technology.

Nearly all (97%) said they wished to speed up responses to external disruptive events, although 60% admitted they lacked access to data that enables this type of agility.

And 92% believed it would take weeks if not months or even longer to find new suppliers that meet their ESG standards.

Donna Wilczek, senior vice president of product innovation and strategy at Coupa, said: “Even with all the will in the world, no business can fully realise their ESG goals and make a meaningful difference if they do not possess accurate and timely data on which to make decisions.” 

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