It’s crucial to align business objectives with ESG outcomes to integrate sustainability into your strategy. Simplifying and centralizing data management will help you understand your organization’s specific situation and needs. Additionally, you’ll need executives’ support and a suite of intelligent tools to plan, track and improve your performance.
Your colleagues and competitors know that acting on ESG measures is good for business. Troves of data and research prove it. The IBM Institute for Business Value 2023 report, The ESG data conundrum, surveyed 2,500 executives across 22 industries. According to the report, ESG data and capability leaders are 43% more likely to outperform on profitability, and 52% are more likely to say that ESG efforts have a huge impact on profitability.1
When ESG data is viewed as a vehicle for driving business value, it generates insights that create opportunities and boost performance. However, only a few companies have reached this level. Rather than strategically harnessing ESG data and using it for identifying opportunities to innovate and streamline, many organizations are only focused on meeting immediate compliance demands. Business leaders need to see ESG transparency through a new lens to deliver better results.
Executives have a golden opportunity to shape their sustainability narrative by providing transparent information on the initiatives and sharing annual progress updates. This approach empowers individuals to make informed choices and fosters loyalty among a new generation of purpose-driven consumers who seek meaningful connections with responsible companies.
At least 60% of the trailblazers answered “yes” to all three.
Do our employees understand the environmental sustainability strategy?
Is our environmental sustainability strategy supported by effective change management?
Do we solicit employee input on environmental sustainability opportunities?
Whether it’s reducing environmental impact and improving supply chain circularity by updating apps or using AI to optimize resource consumption, data strategy can contextualize sustainability progress and boost the bottom line.
According to Jonathan Wright, Global Managing Partner Sustainability Services and Global Business Transformation, IBM Consulting, “Data is the lifeblood of ESG. Now is the time for enterprises to act. By operationalizing ESG plans, enterprises are putting information in the hands of operators who can make informed business decisions that can improve their ESG impact on a daily basis.”
In addition to helping organizations consolidate and contextualize their sustainability data to drive better decision-making, infusing AI into the data strategy can help with prediction, optimization, anomaly detection, computer vision and language understanding.
Establish an enterprise data warehouse or lake.
Align and socialize a consistent definition of sustainability metrics and common data sourcing.
Define enterprise-wide information standards for sustainability.
Create governance for sharing data
Promote access and openness through a hybrid cloud approach.
Reducing energy consumption and emissions Melbourne Water replaced its existing system with the IBM® Envizi™ ESG Suite to manage transactional energy data and eliminate data retention and reporting challenges hindering its sustainability efforts.
Using predictive maintenance for better asset management Downer uses a platform powered by the IBM® Maximo® Application Suite that harnesses complex analytics and near real-time data to support predictive maintenance for around 200 trains.
Progressing toward net-zero goals Growthpoint uses the IBM Envizi ESG Suite to capture, consolidate, analyze and report ESG data. It builds assets using the IBM platform to improve energy and resource efficiency.
Sustainability trailblazers connect their goals to daily operations with data, automation and intelligent infrastructure. Once the strategic roadmap is in place, you can begin implementing the plans and accelerating progress toward your goals.
Citations
¹ The ESG data conundrum, IBM Institute for Business Value, April 2023
² Redesigning brand values, IBM Institute for Business Value, April 2023