Supporting ESG Goals with Corporate Card Solutions
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Every business strategy nowadays comes into question if you think about the pressure that the broader movement for climate justice brings against businesses these days. But that might not be the only reason why aligning corporate spending with the Environmental, Social, and Governance (ESG) goals is more critical than ever. With climate change being apparent, following a sustainable path for modern business strategies could show how your company is acting socially and environmentally responsibly.
Corporate card solutions offer a practical way to enforce responsible spending by restricting transactions to specific merchant categories and streamlining ESG-related transaction analysis, alleviating the already-pressured finance teams.
Let’s find out how these tools can help your company drive sustainable practices, reduce the environmental impact of your business and stay accountable to your ESG objectives amidst rising demands for climate action.
The growing importance of ESG goals for modern businesses
ESG goals are a 17-step program developed by the United Nations to achieve more accountability in environmental-, social- and governance practices. Over 90 per cent of the world’s largest companies now report on ESG performance, reflecting the increasing importance of sustainability and ethical practices in the business landscape.
Consumers, investors, and employees favour companies prioritising more than just profits. By pursuing ESG goals, organisations signal their commitment to sustainability, which helps build trust and loyalty among eco-conscious customers and socially responsible investors.
Companies are under pressure to reduce their environmental impact by minimising carbon emissions and waste, lowering energy consumption and sourcing sustainable products. These actions not only mitigate their carbon footprint but also position them for long-term financial performance, as they can benefit from sustainable finance initiatives and avoid the risks of greenwashing through questionable marketing.
Equally important are the social and governance components of ESG: Companies that prioritise human rights, diversity, and ethical business practices create a more inclusive culture that boosts employee satisfaction and strengthens their reputation. By effectively managing these social issues and aligning with key performance indicators (KPI), businesses can enhance their ESG performance and cultivate valuable partnerships with local communities.
As you can see, it’s much more than just buzzwords; ESG initiatives are a way to prove your company’s positive impact on society and remain competitive in a fast-evolving marketplace.
The role of corporate cards in ESG compliance
But how can corporate cards play an essential role in helping companies meet their ESG compliance goals? — They offer a hands-on approach for businesses to ensure their time management aligns with responsible practices.
One key aspect is company policy adherence, where corporate cards allow businesses to enforce spending guidelines that align with ESG objectives. By restricting card usage to certain merchant categories, companies can ensure that every transaction aligns with their sustainability and ethical standards.
Another vital feature is transaction visibility, which gives finance teams real-time oversight of company spending. With this level of transparency, monitoring and tracking purchases becomes much easier, ensuring that they are aligned with the company’s ESG goals. This visibility also helps businesses quickly identify any spending that falls outside of policy guidelines, maintaining accountability and reducing ESG risks.
Lastly, corporate cards enable automated policy enforcement, reducing the need for manual oversight. Automated systems can enforce spending limits, flag unauthorised transactions, and ensure that purchases comply with ESG criteria. This consistent application of policies not only lightens the workload for finance teams but also helps prevent errors and ensures that ESG guidelines are followed across the business — even while travelling.
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Facilitating ESG reporting with corporate card solutions
Corporate card solutions — even virtual ones — simplify the process of tracking and reporting ESG-related spending for businesses by leveraging transaction analytics functions. By using these tools, companies can easily track their sustainability and ethical progress, ensuring they stay accountable to their ESG goals. Data collection and organisation can be simplified with transaction analytics, helping businesses focus on showcasing their sustainability achievements and making it easier to align spending with ESG priorities.
Automated categorisation
One key way corporate card solutions support ESG reporting is through automated categorisation. Every transaction made with the card is automatically sorted based on predefined ESG categories, such as whether it’s from an eco-friendly supplier or an ethical service provider. This automation saves time and ensures that no spending on sustainability or social responsibility goes unnoticed, making it more straightforward for finance teams to track and report ESG-focused purchases.
Integrated reporting tools
Companies can use the transaction analytics functionality of corporate card platforms to analyse spending patterns and align them with ESG priorities, offering insights into sustainability efforts in just a few clicks. Instead of manually gathering and organising data from different departments, the system pulls all relevant information together. This makes it easy for companies to see how they’re performing while keeping their ESG goals—including their carbon footprint—in check.
Compliance with ESG regulations
Lastly, corporate card solutions help companies stay on top of compliance with ESG regulations. With regulations becoming stricter, companies need accurate data to ensure they meet industry standards and government requirements. Corporate cards automatically track and store relevant transaction data, making it easier for businesses to meet reporting deadlines and avoid compliance issues. This not only ensures companies remain in good standing but also strengthens their reputation as responsible, forward-thinking organisations.
Enhancing governance and sustainability through spend control
Enhancing governance and sustainability through spend control management is a practical way for businesses to stay in line with their ESG strategy. By managing how and where money is spent, companies can actively reduce their environmental impact, promote ethical practices and maintain strong governance.
Let’s dive into some examples:
Spend control and vendor restrictions
With business card solutions, your company can control spending by limiting purchases to specific merchant categories that align with your sustainability standards. For example, when employees are on the road, category restrictions can ensure responsible spending and help prevent purchases that might conflict with your organisation’s ESG goals.
Reducing the carbon footprint
Controlling spending can help your business to reduce your carbon footprint. By choosing local or environmentally conscious suppliers, you can, for instance, cut down on carbon emissions linked to transportation and logistics. With Corporate cards, this becomes even easier to track these sustainable choices and ensure that every purchase supports your corporate sustainability initiatives. Additionally, reducing unnecessary spending or favouring digital over physical transactions can further lower environmental impact.
Real-time monitoring for governance
Good governance relies on transparency, and corporate cards offer real-time tracking of all transactions. This allows your business to instantly spot any spending that doesn’t comply with your ESG or financial policies. With this level of monitoring, your firm can address issues immediately, ensuring spending stays ethical, sustainable and aligned with your ESG strategy. Real-time visibility also boosts accountability, reducing the chances of fraud or unauthorised purchases.
Corporate cards as a tool for social and ethical responsibility
Corporate cards are powerful tools that can significantly enhance a company’s social and ethical responsibility efforts. By strategically managing spending, you can ensure that your business’ purchasing decisions align with your values and commitments to ethical practices.
Here’s even more about how corporate cards contribute to this mission:
Supporting ethical businesses: Corporate cards enable your company to limit merchant categories that match your sustainability practices. For example, you can restrict purchases to approved means of transportation, such as public transport and car rentals, for your employees.
This proactive approach ensures that spending aligns with your company’s values and protects its reputation. It also sends a clear message to employees about the importance of ethical spending.
Visibility into social impact: Corporate cards provide valuable visibility into your company’s spending patterns, allowing your finance teams to assess the social impact of every purchase. By tracking transactions, you can analyse where your company’s money is going and evaluate the broader implications of your spending.
For instance, you can then identify which suppliers contribute positively to the community or support diversity and inclusion initiatives. This transparency helps your company measure its social impact more effectively and adjust purchasing decisions in its supply chain to better align with your company’s policies for ethical commitments.
Blog article
Why Smart Corporate Cards Are a Must for Businesses
Payment methods have been undergoing a massive modernization phase, and the traditional corporate credit card is no exception. But the real question is, are these cards truly smart or just another gimmick?
Francesca Burkhardt,
Product Marketing
How Yokoy Pay helps to achieve ESG goals
Now that you know how important company cards can be, let’s introduce Yokoy Pay: It’s a powerful solution that helps your business achieve ESG goals practically and efficiently. By leveraging smart features like AI or automation, Yokoy Pay empowers your company to manage spending responsibly and sustainably.
ESG-compliant spending controls
Yokoy Pay offers robust spending controls that allow you to restrict transactions to specific merchant categories. This not only helps to ensure that spending aligns with your company’s ESG standards, but also helps create a responsible purchasing environment and reinforces your company’s commitment to sustainable practices.
Integrated ESG reporting
With Yokoy Pay, ESG reporting is a breeze: The zero-touch platform integrates data from transactions, making it easy for you to track and measure your company’s ESG performance. This automated transaction analysis provides valuable insights for your finance teams on how spending impacts your sustainability goals, allowing you to communicate your progress clearly to stakeholders and customers via social media or other outlets.
Automation for more efficient use of resources
Yokoy Pay automates many processes involved in financial management, freeing up time and resources for your finance team. Every payment made with Yokoy’s smart corporate card is tracked and reported automatically. This reduces manual tasks, and your employees can focus on more strategic decisions that drive ESG compliance and sustainability efforts. This increases efficiency and ensures that your resources are used effectively to meet your goals.
AI-driven insights
Leveraging the power of AI, Yokoy can help to achieve deeper insights that help you make more informed decisions. You can act faster on spending patterns with instant access to detailed transaction analytics. Real-time insights enable you to optimise your financial strategies while aligning with your ESG objectives.
Global reach with local impact
Yokoy’s Pay solutions are designed to support businesses of all sizes, no matter where they operate. This global reach allows companies to implement ESG practices across different regions while making a positive local impact. By enabling responsible spending on a global scale, Yokoy Pay helps businesses contribute to sustainability efforts in their communities.
Next steps
Discover how integrating corporate cards can streamline your spending, enhance financial management, and support your ESG goals. Schedule a demo today to see how these solutions can transform your purchasing processes and drive your commitment to social and ethical responsibility!
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