The new economy demands business accountability on ESG development. To trace the impact and minimize risks, companies must use advanced digital data management tools.
Implementing ESG principles in business should not consider only the impact on the environment, social sphere, or corporate governance. Owners and top managers of companies now understand that ESG is a certain mentality directly related to the long-term business development strategy and its profitability in the future.
Today, business transformation towards ESG is supported by new generations concerned with the ESG agenda. They desire to reduce harmful effects on the environment, build high-quality relations between business and society, and maximize transparency.
The number of investors and experts who take ESG factors into account in their decision-making is constantly growing. Today, it is essential for a company to follow the ESG principles. Moreover, most investors believe that companies that adhere to the ESG concept are the most reliable in the long run.
Workiva published the results of their survey of individual investors, where 70% of respondents believe that businesses have a responsibility to display to investors their ESG effectiveness. Young investors between the ages of 18 and 34 are the most demanding of quality
ESG data. According to the study, transparency in ESG disclosures is becoming an essential condition in investor decision-making.
Workiva predicts that most companies will face increased demand from investors to report on their progress and provide quality data. 72% of individual investors want companies to assess their ESG efforts easily by delivering data.
Managing environmental, social, and ethical impacts starts with data. And it is not just about the data provided to stakeholders for the best cooperation. For this data to be used in ESG management, it must be accurate and quality. It requires a data management system that monitors the integrity of the data, its completeness, consistency, and accuracy throughout the cycle.
Working in the cloud provides vast benefits in terms of the sustainability of business development. Test results show that the carbon footprint of cloud-hosted workflows
is lower than when performing the same actions in an enterprise data center.
Cloud-based software and a minimal set of hardware allow even small-scaled businesses to launch a solution for the best data management. Tagging and tracking with cloud-based software is the most affordable solution at the moment. It allows minimizing the hosting costs and advances ESG transformation.
Data tracking provides materials for calculating the carbon footprint and shows how the company can reduce it. Manufacturers can use
environmental footprint calculators to create a carbon-neutral product chain and prove this neutrality with the data collected.
Digital tools can also help reduce the negative impact on the environment. To keep data protected and immutable, companies can use
blockchain as a storage tool. In these times, when data is considered more valuable than money, faster and more secure access to data storage is very valuable. Other digital tools and software are used for forecasting, planning, abuse prevention, robotics manipulation, product quality management, and security. With machine learning technology, it is possible to optimize the supply chain, minimize energy consumption and
CO2 emissions, ensure product storage, and enhance marketing.
Big Data and machine learning analyze ESG metrics and work better than mathematical modeling and classical strategies. Non-linear algorithms identify patterns between ESG profiles and the company's financial strength, offering simple and effective methods.
Using machine learning tools, employees can effectively identify specific micro-actions that best contribute to the ESG transformation of various departments.
The current crisis has pushed companies to use new solutions, which has led to a giant leap towards digitization. The next step is sustainable development, environmental and social improvements. Following one flagship business that has embarked on ESG transformation, the entire supply chain can become much more sustainable. Sustainability contributes to changing the company's culture, allowing enterprises to move towards greater flexibility, openness, and cooperation. New technological skills, for example, data analysis, new technologies must be firmly and permanently rooted in companies and industries.
