Elements of ESG Management

  • Release version: Xanadu
  • Updated August 1, 2024
  • 2 minutes to read
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    Summary of Elements of ESG Management

    The ESG Management application helps organizations effectively plan and monitor their environmental, social, and governance (ESG) initiatives. It focuses on key elements such as material topics, goals, targets, emission activities and factors, and disclosures. Understanding these components enables ServiceNow customers to systematically manage ESG programs, measure progress, and report on their sustainability performance.

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    Material topics

    Material topics represent an organization's most significant impacts on the economy, environment, and society, including human rights considerations. These topics are identified through materiality assessments and guide where the organization focuses its ESG efforts. Examples include E-waste management and community volunteering. Understanding the state and workflow of these topics helps track progress and alignment with ESG priorities.

    Goals

    Goals are specific objectives linked to material topics that an organization aims to achieve. They can include measurable targets such as increasing renewable energy use by 2035 or boosting workplace diversity by 50%. Goals can have subgoals and be associated with responsible entities to clarify accountability.

    Integrations with other ServiceNow products enhance ESG goal management:

    • Project Portfolio Management: Enables adding programs and projects that contribute to meeting goals.
    • Integrated Risk Management: Allows incorporating risks, policies, controls, and issues to build a governance framework around ESG goals.

    Targets

    Targets provide measurable milestones for goals. For example, hiring a 30% diverse workforce by a specific date to support a broader diversity goal. Tracking targets helps quantify progress and informs adjustments needed to meet objectives.

    Emission activities and factors

    Emission activities are actions that result in pollutant releases such as greenhouse gases (GHG). Emission factors are coefficients used to convert activity data into estimated GHG emissions, facilitating consistent measurement. Establishing a library of emission activities and factors is essential for accurate emissions tracking within an ESG program.

    Disclosures

    Disclosures are reports that communicate an organization’s ESG performance to external stakeholders. These reports demonstrate transparency and progress on material topics, supporting regulatory compliance and stakeholder engagement.

    Before you start your environmental, social, and governance (ESG) initiatives, familiarize yourself with the key elements such as material topics, metrics, and disclosures that make up the ESG Management application.

    The key components of the ESG program are as follows:
    • Material topics: Themes that you want to work on.
    • Goals: Objectives that you want to reach based on your topics.
    • Targets: Set targets to track and measure the progress of the goals.
    • Emission activities and factors: Activities that lead to emissions.
    • Disclosures: Reports generated to show the company's progress on the chosen material topic.

    Material topics

    Material topics are topics that represent an organization's most significant impacts on the economy, environment, and people. Companies identify these material topics by performing materiality assessments. These topics reflect the organization’s most significant impacts on the society, environment, and people, including impacts on human rights. Some examples of material topics are E-waste management, giving and volunteering, and so on. To learn about the states of the material topic, refer to Material topic workflow and states.

    Goals

    Goals refer to objectives that an organization sets for itself to make an impact on their chosen material topics. You can link goals to material topics. Some examples of goals are as follows:
    • Using renewable energy by the end of the year 2035.
    • Increase diversity in the workplace by 50 percent.

    A goal can also have subgoals. You can also associate different entities to the goal so that you can track who is responsible for fulfilling the goal.

    If you integrate ESG Management with other products, you can also do the following:
    • If you integrate with Project Portfolio Management, you can add programs and projects to capture the work being done to meet your goal.
    • If you integrate with Integrated Risk Management, you can add risks, risk statements, policies, control objectives, and issues to your goals and build a governance framework.

    For more information on integrations, see Integrating ESG Management with other applications.

    Targets

    Targets help you to measure your goal. For example, to meet the goal of increasing diversity in the workplace by 50 percent, the target can be to hire 30 percent diverse workforce by the first quarter of 2035.

    Disclosures

    An ESG disclosure is a form of public reporting by an organization about its performance across various ESG issues.

    Emission activities and factors

    An emission activity refers to any activity that is associated with the release of pollutants such as Greenhouse gases (GHG).

    The release of GHG into the atmosphere depends mainly on the activity and the product that emits the gases. To estimate GHG emissions per unit of available activity, you must use a factor called an emission factor. An emission factor is a coefficient which allows to convert activity data into GHG emissions. It is the average emission rate of a given source, relative to units of an activity or processes. As an ESG program manager, you must set up your library of emission activities and factors.