Recently, we saw world leaders come together at COP27 in Egypt to discuss the biggest challenges around climate change. The agreement demanded a collective effort to restrict global warming by 2 degrees Celsius, and ideally by 1.5 degrees Celsius by 2030, something that would require a 50 per cent reduction in greenhouse gas emissions and reaching net zero emissions by 2050.
Of over 70 countries to have committed to the UNDP’s 2030 sustainable development goals and Net Zero by 2050, three are in the GCC – the UAE, Saudi Arabia and Bahrain. The UAE Net Zero by 2050 is a national strategy to reach net-zero emissions by 2050. Various governments and other organizations in the UAE have integrated ESG practices into their operations and set clear targets for the future.
They have also been looking into sustainable financing, and the UAE itself may enforce ESG standards for all organizations to comply with soon. Moreover, the UAE’s focus now is on getting everyone to participate in ESG without the need for regulatory requirements in place.
We are at the precise point in time to stop and ask a few crucial questions. How can ESG be adopted in a more seamless and sustainable manner? How can organizations consider cultural and regional context as well as economic viability when implementing ESG?
What roles do the government, organizations, and technology companies play in realizing ESG for the future?
Technology and ESG
It is no more a secret that tech companies play a significant role in the global shift towards ESG. Not only do they contribute by integrating ESG into their own business operations, but others’ ESG commitments also rely on the innovation of tech companies.
With the emphasis on digital transformation and automation, organizations are relying on new technologies to help them meet their ESG objectives by reducing resource-exhaustive practices.
Developing sustainable IT is a very small part of the wider concept of sustainable technology. Gartner defines it as a framework of digital solutions that can enable ESG outcomes for the enterprise and its customers. On this front, emerging technologies present new opportunities to advance ESG. Three areas in particular that organizations have begun looking into to fulfil ESG commitments are ESG reporting, AI/ML, and cloud.
Today, organizations face pressures to adopt more ethical practices from consumers, regulators and investors. Without accurate reporting tools, it can be difficult to achieve ESG targets and collect data relating to ESG goals.
Organizations that choose not to have ESG reporting technologies risk losing investor trust as ESG credentials have become a benchmark that investors must consider when looking into different business opportunities.
Moreover, data can be increasingly difficult to gather and interpret. By measuring and analyzing an organization’s ESG efforts through an ESG reporting strategy, more informed and effective decisions can be made. This is turn allows organizations to achieve stronger ESG credentials, thus boosting consumer and investor confidence while adhering to ESG requirements and making the best of existing data.
Aside from measuring an organization’s ESG progress, technology can also assist in reaching sustainability goals. AI/ML and cloud are two technologies that can drastically transform processes.
Made possible with the use of virtual environments to imitate existing operations, operational processes can now be performed from anywhere as well as in collaboration with others. Organizations have seen that this alone has drastic benefits for sustainability.
Use the cloud
The flexibility of cloud service models also allows organizations to use only what is needed, increasing efficiency and reducing environmental effects. Remote work has led to the reduction of greenhouse gas emissions and limited the use of materials like plastic and paper.
The power of AI and ML-powered tools is to enable businesses to turn their ESG targets into reality without impeding business operations, incurring costs, or compromising on customer service. AI-powered solutions provide timely, accurate, and actionable intelligence to proactively plan and mitigate economic impacts.
They provide a range of ESG solutions - from automated decision-making to predictive maintenance, and resource optimization - all of which provide insights that organizations need to be able to effectively manage various situations.
Organizations that integrate sustainability into their IT strategy benefit from reduced costs and increased ESG scores overall. But they also gain the competitive advantage of being a sustainable business.
This is where the more viable ESG practices come in, building a better world without sacrificing and incurring losses. Simply put, a holistic view of ESG should add to any organization, not take away from it.
