ESG Transformation: Powering Ahead with AI, Analytics & Data

In an era marked by the looming threats of climate crises, social unrest and geopolitical turmoil, the imperatives facing society today are nothing short of existential. Within this context, the imperative for businesses to embrace practices aligned with Environmental, Social and Governance (ESG) goals has achieved resounding consensus.

The burgeoning influence of ESG is actively re-shaping business paradigms and decision-making frameworks as organizations strive to foster sustainable growth that positively impacts the environment, society and local communities. The momentum toward ESG compliance and the re-structuring of business models is further fueled by socially conscious investors, with Bloomberg Intelligence reporting that ESG and sustainability-labeled funds surpassed USD 2.3 Trillion in the first quarter of 2023.¹ Consequently, managing ESG opportunities has become a pivotal consideration in investment decision-making processes.

Amid global uncertainty, the transformative potential of integrating ESG principles into business strategies has never been more pronounced. The 2023 Edelman Trust Barometer underscores this sentiment, revealing that businesses are now the most trusted institution globally at 62 percent, outperforming governments, non-governmental organizations and the media.² This emphasizes the influential position that businesses currently occupy in driving change both within and beyond their operational realms.

However, realizing the full potential of this paradigm shift poses a multi-faceted challenge. Without the requisite blend of insights, processes and capabilities, organizations encounter formidable barriers in integrating ESG practices into their overarching strategies. Encouragingly, comprehensive Artificial Intelligence (AI) and analytics-driven solutions are emerging to assist organizations at various stages of their ESG journeys.

Elevating ESG Reporting Standards to Foster Trust

The surging interest in ESG from consumers and investors alike has heightened scrutiny on the actions companies take to embed ESG practices into their operations. Consequently, standardized ESG reporting has become increasingly vital in fostering trust and circumventing accusations of greenwashing, with frameworks such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) spearheading these efforts.

However, there is consensus among ESG leaders that more work is needed. Ipsos reports that a staggering 83 percent of ESG leaders agree that existing Key Performance Indicators (KPI) and standards related to ESG compliance and benchmarking are too fragmented.³ Challenges also persist regarding the accuracy and comprehensiveness of sustainability data, with Deloitte research indicating that 35 percent of executives cite data quality as the foremost challenge in enhancing sustainability disclosures.⁴

Collating and evaluating pertinent ESG data across all touchpoints of an organization's value chain can strain analysts' time and resources. To surmount these challenges, an increasing number of businesses are seeking next-generation data analytics solutions that lay the groundwork for sustainable growth and facilitate seamless automation of ESG data collection. Research from WNS and Forrester Consulting highlights that 42 percent of decision-makers regard third-party service providers as pivotal enablers in their data and analytics journeys.

By leveraging partners' expertise in ESG data analytics, businesses can access contextualized and enriched ESG data seamlessly collected from suppliers and customers. Furthermore, analytics engines can facilitate best-in-class data governance and pinpoint ESG risk indicators, with automated reporting furnishing intuitive insights.

In doing so, businesses can transcend mere compliance and offer a level of ESG transparency that nurtures trust among stakeholders, underscores responsible behavior and fosters long-term differentiation.

Achieving Long-term Growth through AI-powered Forecasting

Buoyed by this robust foundation, businesses will be empowered to forecast progress against longer-term ESG goals, whether set for 2030, 2050 or beyond. AI-powered scenario simulation and what-if analyses can illuminate the current trajectory companies are on and pinpoint corrective measures to ensure the attainment of goals. The German Federal Agency for Cartography and Geodesy's digital twin is a prime example. By amalgamating AI, analytics and data-driven methodologies, the Digital Twin Germany platform can simulate diverse future scenarios to effectively address challenges such as escalating land usage, surging energy demands and extreme weather events.⁵

Unlocking insights in this manner will be pivotal in ensuring that businesses' ESG journeys undergo the continual enhancements necessary for success, with systems and processes evolving in tandem with emerging technologies, methodologies and regulatory frameworks. Partners with robust domain expertise can assist companies in staying ahead of the curve in this regard, particularly as regulatory shifts loom large, with calls for nature risk to be accorded the same significance as financial, operational and climate risk.⁶

Overcoming Barriers and Unlocking Innovation

The benefits of embedding ESG principles into business operations are manifold and far-reaching. Doing so engenders trust among consumers and investors, attracts and retains top-tier talent, burnishes brand reputation and, more significantly, unlocks insights that fuel sustainable growth. Data, analytics and AI are re-defining the very essence of ESG practices, integration and reporting, propelling businesses toward fulfilling their commitments to effecting positive planetary change.

Despite these strides, challenges and barriers persist in implementing ESG practices, ranging from initial costs to the dearth of ESG-related data. Nonetheless, with the right partners, businesses can surmount these obstacles, leveraging end-to-end solutions that seamlessly automate ESG data collection, chart a roadmap to manage sustainability goals and drive long-term value for all stakeholders.

Ready to propel your ESG journey to new heights? Discover the power of AI, analytics and data in transforming your business into an ESG trailblazer.

References

1. What Is ESG Investing and What Financial Risks Does It Highlight?

2. 2023 Edelman Trust Barometer

3. The Future of ESG?

4. Survey Findings on ESG Disclosure and Preparedness

5. Building a Digital Twin for Germany

6. Final TNFD Recommendations

About WNS Analytics:

WNS is a digital-led business transformation and services company with 60,513 professionals across 64 delivery centers worldwide, including facilities in 13 countries. WNS combines deep industry knowledge with technology, analytics and process expertise to co-create innovative, digitally led transformational solutions with over 600 clients across various industries. WNS Analytics is the Data, Analytics and AI practice of WNS that enables business decision intelligence for clients by combining Artificial Intelligence (AI) and Human Intelligence (HI). We cater to 250+ global companies including Fortune 100 and Fortune Global 500 organizations. WNS Analytics is a robust practice of 6,500+ Domain, Data, Analytics and AI experts with proprietary AI-led assets and innovative technologies. We enable businesses to make transformative decisions backed by data-led intelligence, ensuring differentiated outcomes. WNS Analytics is an end-to-end Consulting-to-Implementation partner delivering business goals for clients with an integrated ecosystem of co-creation labs, strategic partnerships and outcomes-based engagement models.

To know more, visit https://www.wns.com/capabilities/analytics