NTT DATA Business Solutions
Brandon Evans | June 8, 2022

Use Cloud Technology to Support ESG Strategies


(4 minute read)

According to a paper published by NYU and Rockefeller Asset Management, studies have been finding a correlation between commitment to environmental, social, and governance (ESG) initiatives and financial performance long before the pandemic. But it’s not as simple as reducing your carbon footprint for increased profits. There’s more to it than that, and rating systems for success can vary wildly. In fact, inconsistency in data quality and widely accepted KPIs can be a real struggle for many. Adding to that, many companies are also struggling with outdated technology systems for their business. That can make tracking and reporting for ESG either out of reach or insufficient, due to data silos and other processes preventing the necessary transparency.

Yet, despite the difficulties, over a third of mid-size companies consider ESG initiatives a top priority for driving revenue growth, according to a recent study by SAP Insights. Increased sustainability even edges out introducing new products and improving customer experience. In fact, 82% of SAP’s survey respondents said that they have at least started their transformation journeys. You can understand why when you see articles on that cite data points like:

  • More than three-quarters of consumers and employees are more likely to buy from and/or work for a company that stands up for ESG issues.
  • 76% of consumers would discontinue relations with companies that treat employees, communities, and the environment poorly.

Along similar lines, SAP’s study (referenced above) looks at the process of transformation required to increase business performance, better respond to future risks, and remain competitive. The key factor being that it is indeed a process to get to the point of being able to implement ESG initiatives successfully. Most businesses understand that they can’t just sprinkle ESG initiatives on top of what they’re already doing. They need the right people, technology, and processes in place to make it work and become part of the company’s DNA. Otherwise, inefficiencies due to things like siloed teams, manual processes, and data contained in too many disconnected systems will hamper ESG efforts before they even get started.

What does this transformation process look like? That depends on where your starting point is. For example, if you have a problem with outdated systems and data that must be pulled manually from disparate systems, you’ll likely need to start by investing in a cloud-based ERP to address needs like working across business units collaboratively, automation, accuracy, and real-time data. You will need to manage the data that you already have before adding new tracking and reporting capabilities. On the other hand, it may be that your company is much earlier in the process and needing to focus on how ESG will fit into your overall strategy and align with the people and processes you intend to carry forward.

Whatever your starting point, it shouldn’t mean investing in lumbering projects that are expensive, time consuming, or ultimately fail to deliver value. It should mean finding answers to your challenges that are flexible enough that you can adjust scale or priority as you respond to changing market dynamics. From a digital perspective, that means cloud technologies need to form the backbone of your operation so that you can implement projects in a modular fashion and pivot faster.

In turn, that plays into your ESG initiatives by allowing you to build your future success on a solid foundation where you can align your people, processes, and technology in such a way that will scale over time. And, with modular deployments using cloud solutions, you can choose each new element based on your specific needs as they evolve. Ultimately, it’s about what makes the most sense for your business and mitigating risk whether that means strengthening supply chains, increasing cybersecurity, or attracting and retaining the right talent. Those things can often be intertwined, given that a number of solutions impact multiple areas of your business.

Download the white paper to learn more about SAP’s study on ESG initiatives in mid-size companies. Or contact us to assess your best starting point.