ESG Analytics

An analytical approach to sustainability 

Analytics has proven to be a deciding factor in who comes at the top in this ever-increasing business competitiveness. Organizations are always on the lookout for newer methods and technologies to drive business growth. Similarly, Sustainability has become synonymous with resilient enterprises and more and more organizations are now aiming to make a positive impact on the environment and society. 

However, this space has lacked much-needed technological intervention to foster data-driven & fast-paced decision making. Analytics can play a crucial role in optimizing the sustainability service delivery with more precision and accuracy. 

Currently, several sources are tracked to accumulate ESG Data, sources such as news, government regulations, rankings and awards, social media, and companies’ reports. However, the traditional systems in place make it a complex and time-consuming process. 

Emerging data analytic technologies can address these challenges. Thanks to the latest tools and techniques, real-time analysis of vast quantities of ESG data is possible which can potentially provide several benefits to organizations, such as: 

Limiting supply disruptions and increase resilience to price shocks

Sustainability analytics has the potential to help organizations reduce resource use. This in turn makes them less vulnerable to price and supply volatility. Predictive analytics can help organizations anticipate future changes in supply, demand, and price thereby helping them be more resilient to external changes.

Competitive advantage

Transparency of information is ever increasing. Organizations need to follow ethical business principles and ensure no environmental or social harm is done. This links directly to their ‘License to Operate’. Reputational risk is one of the key factors in determining competitiveness, however with advanced analytics organizations will have the capability to prove that their sustainability practices are more than just talking with hard data in hand. 

Identifying emerging risks 

Predictive analytics help predicts trends within a company, which helps in identifying future risks in areas such as resource use, environmental impact, and labour practices—across the entire value chain of operations. These insights can help manage and mitigate risks before they become headline news.

However, new researches suggest that other factors can affect organizational performance equally, factors such as employee headcount, hours of operation, production levels, facility productivity, and sales volume, as well as external data such as weather. With these new factors accounted for the result of the analysis are more precise and accurate. 

Analytics is not a one-shot bullet by itself. The need for the hour is human expertise so that an employee can utilize the latest technologies to achieve the desired outcomes. Organizations need to focus on employee awareness and training programs that will help them understand the intricacies of analytics and help encourage them to do the right thing. 

Lastly, organizations need to constantly follow changes in the business world. Sustainability space is relatively new and thus is prone to frequent changes. Regulatory reforms, newer metrics, raw material and fuel pricing, update on different sustainability frameworks are just some examples of the rapidly changing world. Among these changes, technological transformation offers a never-ending opportunity to improve performance at a significantly lower cost.