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8 Critical ESG Data Challenges Impacting FMCG

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Flemming Laursen | Jun 08, 2023
8 Critical ESG Data Challenges Impacting FMCG

One of the most data-intensive industries is Fast Moving Consumer Goods (FMCG), because the companies in this industry must continually gather, analyze and utilize data to stay competitive and appeal to their buyers.

However, all of this data sourcing, processing and management comes at a high price and poses several significant data challenges that impact an organization’s ability to operate sustainability, efficiently and effectively.

8 data challenges that impact the FMCG industry

With 80% of data scientists’ time being spent on data collection, cleansing and preparation for analysis, it’s an obvious area of the business that can be optimized to drive efficiencies. But even seasoned data professionals struggle with sourcing, maintaining and managing data for FMCG businesses because of the vast volumes, continuous changes and increasing obligations to comply with.

Let’s take a look at some of the main challenges organizations face:

 
  1. Siloed and disconnected data

    2. Data is often stored in isolated information systems that cannot communicate with one another and the data is underutilized as a result. This scenario is very common in the FMCG industry and can prevent companies from having a complete view of their operations leading to inefficiencies, poor decision-making and missed opportunities.

  2. Data security scares

    3. FMCG businesses collect and store a large amount of sensitive and confidential data, including personal information, financial data and intellectual property. This makes them a bigger target for data breaches and cyber attacks, which can cause significant damage to a company’s reputation and financial stability.

  3. Poor data quality and poor decisions

    4. For the FMCG industry, inaccurate, incomplete or inconsistent data can lead to errors, bad decisions and costly mistakes. Maintaining data is timely, costly and complex, often leading to companies keeping out-of-date data or data junk and increasing their risk.

  4. Data integration and standardization struggles

    5. FMCG companies gather data from a variety of sources, including sales data, customer data and supply chain data. Integrating and connecting this information can be challenging, particularly when data is stored in different formats or systems. Preparing and cleaning raw data for integration is also normally required before it can be imported.

  5. Real-time data is a real challenge

    6. Real-time data can be a game-changer for FMCG companies, as they can respond quickly to changing market conditions, customer preferences and supply chain disruptions. However, building a reliable place to access real-time data is very challenging, particularly when information is stored in different formats, systems or silos.

  6. Complex analytics and mixed reporting

    7. To stay competitive, FMCG businesses generate vast amounts of data and continually analyze this information to gain insights and make informed decisions. At the same time, analyzing data can be difficult and frustrating, particularly when data is not consistent or easily accessible. With so many different reports, policies, standards, frameworks and obligations to adhere to, it’s a complicated task to say the least.

  7. Lack of ESG expertise

    8. ESG reporting is becoming increasingly important for investors, regulators, stakeholders and customers, as they seek to evaluate the sustainability of a business. Yet many organizations lack expertise in the standards, processes and tools needed to effectively manage ESG data, often distracting non-data experts, such as compliance and sustainability managers, from their normal tasks and responsibilities.

  8. ESG data and transparency

    9. Pressure is mounting to find more environmentally friendly ways of working to reduce carbon footprints. So gathering ESG data to provide valuable insights into a company’s sustainability performance is critical. Unfortunately, this is often an afterthought for companies, making it a complex, urgent and mammoth task for annual ESG reporting.

     

    FMCG companies need to address these data challenges quickly to stay competitive, make informed decisions and drive business growth. By investing in end-to-end data management, organizations can effectively manage their ESG risks and opportunities and rest easy that their data is accurate and consistent for future reporting.

End-to-End Data Management

DataAssured is an overall approach to (automated) data acquisition, processing and delivery, helping the FMCG industry quickly overcome these data challenges. By addressing each step in the data management lifecycle, businesses can make informed decisions, improve their sustainability performance and drive efficiencies across the business.

Outsource your burdensome ESG data management and reporting tasks today with DataAssured. Learn more.

 

author image
Flemming Laursen

Flemming Laursen, Head of Sales for CleanChain, is an expert in the maximization of profit for companies through the use of ESG tools, data technology and impact sourcing. He was an entrepreneur and worked as director of sales for multiple businesses prior to joining ADEC Innovations.

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