It is also plagued by disparate reporting standards and data management concerns. How can technology be used to bridge the gaps?

Gwyneth Tan, Head, Strategic Programmes (Sustainability), SGTech.

GT: Regardless of sector, digitalization and ESG practices today are becoming increasingly intertwined and interdependent across all business activities. As ecosystem players span not only across different industries but also across countries and cultures, the greening of supply chains is particularly challenging. What is mostly not visible to observers is the extent of what it takes for a business to reduce group emissions by the equivalent of even one ton of carbon dioxide. Some considerations:

  • Abatement begins with baselining, and to derive a baseline, there must be adequate internal coordination, process setting, and information verification. The reality is that most value chains, suppliers and partners do not always possess uniform digital and data capabilities, have similar methodologies of data categorization and quantification; or are even working in similar cultures. Assumptions have to be made out of operational necessity, but this is far from adequate as real data often varies by substantial amounts.
  • Beyond the immense undertaking of cross-border aggregation and verification, Scope 3 data misinterpretations and inaccuracies abound in reported outcomes, which can paint erroneous, or even misleading pictures to corporate decision makers.
  • Beyond the tracking and reporting of environmental footprints, qualitative metrics are varied, as there are reporting standards in existence today. While Sustainability Accounting Standards Board stresses reporting of ESG topics material to the firm, and Global Reporting Initiative takes a more holistic approach looking at environmental, social and governance practices of the organization, the Task Force on Climate-Related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB) are heavily focused on linkages to the company’s financial accounts.
  • Ultimately, benchmarking of ESG practices such as gender diversity, employment of the underprivileged, charitable donations and corporate social responsibility; women’s leadership roles, and reporting frameworks — differ between countries and even between businesses in the same industry. Thus, there is too much room for subjective interpretation of data and information.

According to one of our member firms specializing in this field, Zuno:

  • AI is used to help business to gain meaningful insights into their emissions data, and plan for data-driven abatement.
  • Internet of Things devices have been deployed in brownfield buildings and plants to monitor room temperatures, smart intelligent power supply, even in automated cleaning.
  • Dedicated ESG accounting platforms can be leveraged to help boards of directors and their management in the massive undertaking of consolidating and interpreting group data, not only in terms of speed by also in accurately pivoting datasets for ease of understanding by stakeholders.

DigiconAsia: What steps are Chief Information Officers and their peers in industry taking to integrate sustainability goals into their organization’s digital strategy and technology infrastructure?