Harnessing ESG and Data to Build Long-Term, Sustainable Value
At the 2024 Climate & Sustainability Leadership Summit, Erik Saito, Senior Vice President and General Manager of EMEA & APAC at Workiva, addresses the critical need for businesses to navigate the complexities of today’s volatile global environment. In his session, “Navigating Business in a Turbulent World,” Saito draws from his extensive experience, including roles in investment banking and senior leadership positions in the manufacturing sector. He emphasizes the importance of creating sustainable value, embracing ESG principles, and leveraging data and technology to build resilient businesses.
The Challenge of Navigating Uncertainty
Saito highlights how businesses today face an unprecedented rate of change. From shifting macroeconomic conditions and capital market fluctuations to a rapidly evolving regulatory landscape, companies are constantly balancing short-term needs with long-term sustainability. “The pace of change is dramatically accelerating,” Saito notes. “The challenge is how to manage immediate demands while positioning the organization for long-term success.”
Executives worldwide, from North America to Europe and Asia-Pacific, are grappling with this balance. Saito hears consistently about the pressure to manage resource constraints while responding to a series of crises. “The feeling that you’re constantly ‘fighting fires’ is widespread,” he shares, underscoring the urgency many leaders are experiencing.
The Evolution of Value Creation: From Short-Term to Sustainable
Saito traces the evolution of how companies define and measure success. Reflecting on his early days as an investment banker at JP Morgan, he explains that, in the past, value creation was often “single-dimensional.” The focus was almost entirely on maximizing free cash flow, often at the expense of employees, the environment, and long-term business competitiveness.
“Companies could boost short-term results by cutting operational costs, but those actions frequently had long-term consequences,” Saito explains. “These decisions came at the expense of communities, the environment, and even the company’s future sustainability.”
Today, the framework for value creation has shifted. ESG principles have transformed the concept of value from a narrow focus on shareholders to a broader view that includes all stakeholders—employees, communities, and the environment. “What makes me optimistic today is that ESG is driving a more holistic, multi-dimensional approach to value creation,” Saito observes.
This shift toward sustainable value creation is not just about compliance or reputation management; it’s a core business strategy. “Companies that balance the needs of their stakeholders—whether that’s investors, regulators, or the environment—are more resilient and competitive in the long run,” Saito emphasizes. This long-term perspective, he argues, positions businesses to weather short-term shocks while maintaining a focus on sustainable growth.
Data: The Cornerstone of Sustainable Decision-Making
A key theme in Saito’s session is the role of data in navigating today’s turbulent business landscape. For companies to make informed decisions about their future, they first need a clear understanding of their current operations. “Data is essential,” Saito says. “Without a clear view of your current state, it’s impossible to chart a path forward.”
Saito recalls his experience in the manufacturing industry, where his team assessed every aspect of their operations to meet the stringent ESG requirements of a major customer. This involved collecting and analyzing data at an extremely granular level—from the chemicals used in production to the energy sources powering their plants. “We had to look at every detail,” he explains. “Even a small change in one area, such as switching to a more sustainable chemical, could have wide-ranging effects on costs, supply chain logistics, and customer delivery timelines.”
However, gathering data is only the first step. The real challenge lies in ensuring the accuracy and reliability of that data. “If your data is collected manually, you run the risk of human error,” Saito warns. “And when business decisions are based on faulty data, the consequences can be significant.”
This is where technology comes in. Saito stresses the importance of automating data collection to minimize errors and provide real-time insights. “Machines don’t need to sleep,” he says. “They can continuously gather data, ensuring that the information you’re relying on is both accurate and up-to-date.” This ability to trust the data is critical for making informed decisions and navigating the complexities of today’s business environment.
The Role of ESG in Future-Proofing Business Operations
Saito also focuses on how ESG principles are reshaping business strategy. Companies that integrate ESG into their core operations are better positioned to manage risks, seize opportunities, and maintain a competitive edge in a rapidly changing world.
“ESG isn’t just about doing the right thing; it’s about being prepared for the future,” Saito asserts. He points to growing regulatory pressure around the world, particularly in Europe and North America, as a key driver of change. Companies that fail to align their operations with emerging ESG standards risk falling behind—not only in terms of compliance but in competitiveness as well.
Saito shares a specific example of how ESG considerations can impact business decisions. While working in the manufacturing industry, his team had to meet the sustainability requirements of a major client. This involved evaluating every aspect of their supply chain, from raw materials sourcing to transportation logistics. “We had to think about everything,” Saito says. “Even something as simple as changing a chemical could affect costs, production timelines, and our ability to meet customer demands.”
Despite these challenges, Saito emphasizes that companies must view ESG not as a burden but as an opportunity. “Embracing ESG makes you more competitive in the long run,” he states. “It forces you to think about the future, innovate, and find ways to deliver value in a way that benefits everyone—shareholders, employees, and the community.”
Building Resilience Through Collaboration
In addition to leveraging data and embracing ESG principles, Saito highlights the importance of collaboration in building resilience. No company can navigate today’s complex world alone, he argues, and partnerships between businesses, governments, and NGOs are essential for driving meaningful change.
“Creating sustainable value requires a collective effort,” Saito says. “Companies need to work with external stakeholders to find scalable solutions that benefit not just their own bottom line but the wider community as well.”
He also emphasizes the need for companies to engage with policymakers as regulatory standards evolve. By collaborating with governments, businesses can ensure their strategies align with the latest regulations and avoid potential risks of non-compliance. “It’s about staying ahead of the curve,” Saito says. “If you’re proactive in your approach to ESG and regulation, you’re not just avoiding penalties—you’re positioning yourself as a leader in your industry.”
The Path Forward: Creating Sustainable Value
Saito concludes by offering practical advice to business leaders: focus on creating sustainable value. This requires gathering accurate, reliable data, analyzing it thoroughly, and making decisions that balance short-term demands with long-term resilience.
“Building a sustainable business isn’t just about surviving today’s challenges,” Saito says. “It’s about ensuring that your company is prepared for whatever comes next.”
In a world marked by uncertainty, businesses that embrace ESG principles, leverage data-driven decision-making, and foster collaboration are the ones that will thrive. Saito’s insights provide a valuable roadmap for leaders seeking to build resilience, drive innovation, and create sustainable value in an increasingly turbulent and ever-changing global landscape.
