Ana Rubio, CEO and Founder of Malta-based start-up datalitiks, on Thursday stressed that adopting environmental, social, and governance (ESG) principles goes beyond the fulfilment of regulations, as one must assess the benefits of embedded sustainability.
She took to social media after the news on Wednesday that European Parliament had reaffirmed its commitment to corporate sustainability reporting standards that will come into effect at the start of 2024. European Parliament rejected a resolution that would weaken the European Sustainability Reporting Standards (ESRS), which cover the full range of ESG issues including climate change, biodiversity and human rights. For non-EU companies operating in Europe, the standards will come into effect by 2028. The European Commission chose to delay aspects of the wider Corporate Sustainable Reporting Directive (CSRD), one being the sector-specific ESRS, recommending delaying the adoption of these rules by two years.
Ms Rubio, who in August 2022 founded datalitiks, a company that measures and drives ESG impact for clients, resulting in “sustainable solutions for a better future”, said that when the call for changes was originally made, she thought she “nearly lost” her job.
She remarked that the postponement of these ESG reporting standards is understandable, as given the widespread economic and social turmoil happening at the moment, “complying with the CSRD adds another level of pressure on businesses”.
“For example, if it is already hard to cope with the increase in costs due to inflation, adding extra costs to be more sustainable – ‘greenflation’ – will exacerbate the situation,” Ms Rubio added.
She said that the current guidelines “are not easy to manage”, even if a business has “an army of consultants” or is immersed in the jargon. This is primarily a result of the lack of “comprehensive language and predefined quantitative key performance indicators (KPIs)”.
While she said that such standards are important, Ms Rubio stressed that businesses must embark on an ESG journey not just to “check regulatory boxes and compile a sustainability report”, as if one is doing so, then the value of the exercise will be “minimal”. This will only prompt the business to incur costs in order to avoid potential fines.
“However, if your organisation starts thinking about embedding sustainability as a way to introduce positive change and mitigate risks both internally and externally, you will begin to outweigh the benefits obtained by the costs incurred,” she explained.
Referring to a study by Accenture on responsible leadership, she highlighted that organisations with a clear ESG strategy that aligns with their purpose perform 2.6 times better than those that don’t.
“Seen in this light, it becomes clear that the approach to adopting ESG should be different from merely meeting regulations,” she said.
However, Ms Rubio also noted that the cost of embarking on a sustainability journey “remains high”, particularly for solutions which are heavy reliant on human capital, “making it unaffordable for many organisations”.
She emphasised that the “challenge” that must be tackled is that of “lowering the adoption barriers for sustainable practices”, an objective that can only be achieved through the effective use of technology as an enabler.
“My initial reaction to the latest developments in sustainability regulations was a bit dramatic, as we do not give up so easily in our mission of doing data for good,” she concluded.
At datalitiks, Ms Rubio manages a team of data experts, delivering data-driven insights for clients and driving positive change through data analytics. She holds a Master’s degree in Business Intelligence from University of Barcelona and also has multiple certifications from Microsoft.
datalitiks Founder and CEO Ana Rubio / Pitchora / Facebook
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