ESG goals for companies have been around for a while, but slowly and steadily, more and more industries are looking for their path to compliance. Global regulations are tightening and public opinion demands good management and sustainability. Challenges remain, as businesses have to balance goals, costs, risks, and opportunities against the ever-present need to, for example, limit their carbon footprint. As a result, companies need to find ways to save big and save fast. Enter technology.
AI and ESG
First and foremost, it’s important to remember that most, if not all ESG data is just that: data. Large amounts of information, systematized, often digitally. It can be hard for a human to effectively process and use all this data, but modern computing technology has long outstripped what an average person can do.
AI and machine learning can systematize and look for opportunities that a human might miss when pouring over oceans of numbers, figures, and statistics. At the very least, AI can help a company limit the time it spends processing information, allowing for savings in efficiency. In the long run, AI and machine learning will be vital for the standardization of this data, which will bring benefits to efficiency across the globe.
Big Data and ESG
One of the main goals of ESG is to provide transparency between companies, industries, and regulators. Big data and management systems can help create more trust and better information simultaneously, without major risks to efficiency. While currently, advantages might be rare or only manifest in edge cases, big data management technology can help a company understand and visualize the data they are already working with.
However, the real benefits are long-term. Investors will start to care more and more about a company’s ESG scores. This means that a) companies will need to actually achieve solid scores across all three metrics, and b) they will need to present what they have done effectively, and transparently and be able to stand out among many other companies that are likely all jockeying for the same investment.
The IOT for ESG
More directly, there is a lot of potential in the Internet of Things (IoT) to help companies improve their ESG scores, particularly the E part. Smart appliances can find methods to be more efficient, while buildings can be cooled, heated, and ventilated more effectively using devices that can learn and analyze datasets to regulate power use. The use of technology will vary from company to company as operations are vastly different. But nearly every company uses computers, vehicles, or HVAC systems, all of which can be made more efficient through smart IoT integration.
What should companies do now?
It’s not exactly rocket science to say that companies need to have an ESG strategy. Most do, alongside a dedicated ESG team. However, as technology evolves and becomes more and more complex, companies can benefit from specialists and knowledge regarding the real capabilities of technology for ESG management. Decision-makers need to stay informed of trends and possibilities by learning from experts and cases where companies have already put these things into practice.
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