First things first: what is Data Governance?
In short, data governance is about how people and systems interact with data.
With respect to ESG, this can go beyond stakeholders within your firm – it can impact your entire supply and value chains. This is because you will likely need to obtain information on from suppliers, and, progressively, third parties, to get an accurate picture of your ‘ESG’ status (for example, the remit of ‘Scope 3’ carbon emissions doesn’t start and end with your own activities and operations).
Yet more than simply having the systems in place that can feed you the data you need from its many sources, it’s better to think of data governance in terms of a cultural shift – a method of not just having the data you need, but having confidence in accuracy.
Remember: you cannot force people to care about data - but you do need them to care about it for it to be trustworthy. That means communicating and educating the ‘why’ not just the ‘how’ when it comes to good data hygiene and management.
Data governance can help you to build the culture you need to engage people with data, communicating what data they are responsible for, where their responsibilities fit in the wider apparatus, and why they should care about it, e.g., what’s in it for them.
How can data governance help your ESG initiatives?
The benefits of data governance go far beyond ESG reporting. That being said, ESG particularly benefits from a robust, data-first culture. Let’s review:
1. Data governance brings consistent, long-term data quality
Data that doesn’t meet a certain standard is unusable at best, and misleading at worst. If your business has been burned by bad data, you might have embarked on a ‘data quality’ initiative, which is a constructive response in the short term. Yet too often we’ve encountered cases where data quality initiatives are the only response to bad data: they fix the problem in the short term, but they don’t look at the bigger picture.
It’s the distinction between treating an illness and preventing one.
A healthy respect for data ensures that data quality doesn’t dip after a project is complete. In fact, it ensures that reliable data is on hand whenever you need it. This removes one potential avenue for error before you even reach the planning phase of your next project – or the next phase of the ESG reporting cycle.