The essential ESG checklist for integrating sustainability in your ERP business processes

Sustainability is not just changing how businesses operate, but redefining what business success means. This paradigm has shaped corporate landscapes as organizations recognize that their responsibilities extend beyond the bottom line. As consumers, employees and investors increasingly align themselves with purpose-driven organizations, environmental, social and governance (ESG) practices are becoming a competitive advantage for businesses attempting to balance profit and purpose.

The stakes have never been higher. Studies show that companies prioritizing sustainability outperform their peers, with research indicating that high-sustainability companies show higher long-term stock market performance. Modern enterprise resource planning (ERP) systems provide the technological backbone to track and measure sustainability initiatives and offer data-driven insights needed to convert ESG commitments to measurable outcomes. IFS Cloud is an example of an ERP technology that includes a sustainability management module that helps customers monitor, manage and report on their sustainability specific goals and commitments.

However, the path to meaningful integration of sustainability in ERP business processes can seem daunting. Organizational leaders often grapple with questions: How do we begin assessing current business processes? What processes need to change to embed sustainability? How do we measure ESG success? Embedding sustainability in an organization’s strategic initiatives and daily operations requires practical implementation steps. The comprehensive checklist below will provide an approach to answering these questions and implementing lasting change. It is important to set expectations that these steps typically require a multi-year effort, often taking corporations two to five years to fully execute and implement.

Set a foundation

• Conduct a baseline assessment of current ESG and sustainability initiatives across all organizational departments and functions. Remember that initiatives such as community relationships, business ethics, employee development and work safety are examples of business practices that fall under the ESG umbrella. Define clear sustainability objectives aligned with long-term business strategy while addressing stakeholder expectations and industry-specific challenges.
• Create a dedicated budget for ESG initiatives with clear allocations across departments.
• Form a cross-functional committee with representatives from key business units.