How data-driven sustainability can boost business value (and how to get there)

Nov 07, 2023

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More than 9 out of 10 respondents in a recent McKinsey study confirm that ESG (Environmental, Social and Governance) topics are on their corporate agenda. Still, when trying to integrate sustainability into the fabric of their organization, many are struggling with data collection and governance. “However, data is an enabler to achieve ESG targets and even create business value,” says Sven Arnauts, data and AI expert at delaware. So, how can businesses mature their sustainability data capabilities? How can delaware help organizations organizations to drive value from it? We sat down with Sven and our sustainability lead David Swillen to understand.

“Checking off compliance boxes and mitigating climate change are no longer the only reasons for companies to drive their ESG efforts,” says David to start. “More and more firms now realize that sustainability can produce tangible business benefits too. Sustainability leaders win customers, investors and new talent. Moreover, they cut costs, boost efficiency, and build resilience. Sustainability is even a key driver for innovation.”

The case for sustainability data

To grasp these compelling opportunities, data is key, Sven continues: “First of all, companies need data to set sustainability targets, measure progress, and report on it properly. Yet, more than showing where they are reaching the bar and where performance is lagging, data can help create the business value that David just mentioned. Take energy consumption, for example. With clear data on when and where they are using water or energy, businesses can optimize consumption to reduce not only emissions but costs too.”

Data is a key enabler, not only to understand and report on your sustainability achievements, but also to create business value.

Sven Arnauts, data and AI expert at delaware

Crack down on greenwashing

Collecting and reporting just any data, however, is no longer enough. Transparency and traceability are now a must, as the EU moves to ban greenwashing and the Corporate Sustainability Reporting Directive (CSRD), European Sustainability Reporting Standards (ESRS), and EU taxonomy are on the horizon. In addition, business partners increasingly demand sustainability-related information from their suppliers. Last but not least, consumers are increasingly skeptical of ESG claims. A recent study by the IBM Institute for Business Value shows that only 2 in 10 consumers claim to trust the statements companies make about environmental sustainability – down from 5 in 10 just two years ago.

“People want to trust the information they read to make informed decisions,” says David. “So, using vague terms such as ‘climate-friendly’ or inaccurate data, even if it’s unintentional, will no longer do. To avoid greenwashing, organizations need to substantiate their claims. That’s why they all need trustworthy, auditable, and transparent data from the entire value chain.”

The ESG data challenge

With so much data available within a company, from so many sources, which data is actually relevant to track sustainability? Or rather: where can your business find precious ESG data? And what systems do you need to gather and aggregate all that data?

Sven: “When it comes to transactional data, organizations know where to find it. However, they have never captured sustainability parameters like energy consumption, emissions, or waste treatment before. Some sources are evident, like the ERP system, smart meters for energy consumption, HR-related applications to understand societal data, or details about the company fleet, for example. But there is so much more relevant data that organizations don’t capture. Identifying that data is a challenging first step. Managing it is a difficult next step. In the best-case scenario, the data is stored in Excel sheets.”

Put the foundations right

“Once companies have drafted their sustainability strategy and dive into their existing data, they run into data governance challenges,” David explains. “The data quality is poor, data is siloed in departments or divisions, or there is no consistent definition of common data sourcing or sustainability metrics, making comparison impossible. So they simply capture evident sustainability metrics and report on it. More than lacking key information, it means going back to the drawing board every time a supplier asks for another type of data or reporting requirements shift.”

The message is crystal-clear: for organizations to make environmentally sound decisions, a strong data foundation and sound data governance practices are just as important for ESG as for transactional data.

We can easily connect the dots and advise organizations on the exact approach and solutions they need to drive their sustainability journey forward and gain true business value.

David Swillen, manager and sustainability lead at delaware

Dive into the green data lake

That’s where delaware brings its expertise and experience on the table. David: “We help businesses build what we call a green data lake: a data lake to store and process sustainability-related information from the most diverse sources. As part of our wider sustainability offering, our green data lake offering includes a series of steps, from checking the data readiness to automating data processing.

The approach is based on years of experience with enterprise data platforms. This way, it is sure to help businesses capture, store, and process the exact data they need, keep data current, and maintain audit trails for reporting.”

Our 'Green data lake approach' consists of 3 steps:

Data readiness check: pinpointing data gaps, verifying the quality of the available data, identifying the data sources in- and outside your company, and implementing data governance.
Data mapping and automation: mapping the required data in the enterprise landscape, defining the data architecture, and automating data extraction, processing, and integration.
Data ingestion and transformation: turning your existing data infrastructure into a modern data platform, built around a scalable, cost-effective data lake, where the raw data is ingested, unlocked, and stored.

explore our full offering

Tap into AI to enrich your ESG data

“To gain enhanced insights into the ESG performance and then take actionable steps, AI can help develop scenarios and enable predictive analytics,” adds Sven. “For example, it can provide answers to questions like, ‘How can I change my production parameters and reduce my carbon footprint, without jeopardizing the quality of my products?’ On top of that, there’s a rapidly growing offering of AI-powered tools to support specific ESG-related tasks, such as Wequity, to name just one example.”

delaware as a facilitator that connects the dots

Sven continues: “At delaware, we support organizations in bringing their sustainability strategy to life. As data and AI experts, we help them install a solid data foundation and drive value from it. On top of that, we can combine that offering with solutions from technology leaders like SAP, Microsoft, and Salesforce, or specific tools from innovative start-ups, such as ventures by delaware like Wequity or Climate Camp.”

“Sustainability is not a one-off exercise. It’s a complex journey and every company takes a different stance and has individual needs. Thanks to our broad network, we can easily connect the dots and advise organizations on the exact approach and solutions they need to drive their sustainability journey forward and gain true value,” David concludes.

The McKinsey study quoted in the first paragraph can be found here.