A Practical Guide to Digitising Sustainability

Worldwide, business leaders continue to face customer, market and investor pressure to optimise operational performance at an accelerating pace and larger scale while meeting commitments to their sustainability goals. However, typical internal and external ESG-related processes remain reactive and ad-hoc, with significant challenges around data siloes, quality, scope, disparity, multiple sources, isolation, capability, ownership and transparency.

To achieve their ESG objectives, companies are pursuing innovation, risk management and new value-creation opportunities through digital transformation of the enterprise, enabling processes to become more automated, better connected and uncover insights. This trend is reflected in The SustainAbility Institute’s recently released “2023 Trends Report: The Ongoing Evolution of Sustainable Business report” (see here), which identified “Technological advancements applied to sustainability” as one of the ten key trends shaping sustainable business and the corporate actions.

While the majority of organisations recognize the need for digital transformation, not all solutions are created equal and various factors such as functionality, budget, internal and external resources, timing and change management will impact the effectiveness and ultimate value-generation achieved. Many of these factors apply universally across every implementation, but when it comes to sustainability functionality, current digitisation technology falls broadly into three practical categories:

  1. Data Acquisition

There are a multitude of methods to capture data on various ESG-related topics throughout an organization’s value chain, though many are still provided non-digitally, e.g. hardcopy invoices, or via “manual digital” methods, such as email. Automating the data acquisition process is improving through mature technologies like Electronic Document Interfaces (“EDI”) and Application Programming Interfaces (“API”), as well as new approaches such as Blockchains, Internet-of-Things (“IOT”) devices, geospatial systems and predictive data through artificial intelligence. Furthermore, data is also available via commercial vendors and open source libraries to supplement primary data with aggregated, calculated and/or secondary data to provide holistic perspectives on ESG performance.

  1. Digital Workflows

To enable ESG processes to capture, process, store and report data efficiently, effectively and meet the ever-changing and evolving needs of sustainability programs, there are a multitude of digital workflow platforms for companies to review and consider. Ranging from self-build applications, cloud-based software-as-a-service solutions, and comprehensive enterprise-level platforms, sustainability teams can digitise their programs regardless of their budget, capability and capacity.

  1. Data processing

Sustainability programs have consistently challenged organisations due to the unique and specialist nature of the data types, sources and calculations needed for regulatory disclosures and corporate reporting. To address this need, there are a range of digital calculators and data processing applications, such as carbon calculators, supply chain reporting platforms, and physical climate change risks assessments that organisations can use to provide and/or process the data required.

ERM’s Digital Advisory services can help organisations navigate their specific needs, particularly on the categories listed above, when digitising their sustainability programs through our proven and practical technology-agnostic approach. We deliver impactful business outcomes through our global network, sustainability subject matter expertise and extensive digital capabilities.

Written by Eimund Loo, Digital Advisory, ERM

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