Writen by Caroline Capitani, VP of Digital Design and Innovation,
5 minutes of reading
Technology powering ESG initiatives
There is no doubt that ESG needs to be the focus of companies that intend to keep growing, becoming stronger and more resilient in the future. Acting in accordance with these practices is no longer just a matter of purpose and has become essential for the sustainability of the business.
The concern with the ESG – an acronym in English that refers to environmental, social and corporate governance issues – is increasingly latent and strong within organizations. When we think of technology, it is important to highlight it as one of the main drivers of movement, especially in the data era in which we live. I recently read about the lack of the “T” in the acronym, however, I prefer to look at it from the perspective of abundance: the “T” that encourages ESG. Technology can break down social barriers, but it can also exacerbate inequality and discrimination if not used wisely.
We know that technology can, for example, facilitate the identification of discriminatory behaviors and combat them, through Artificial Intelligence (AI), helping to overcome prejudices, instead of perpetuating them, with the guidance of humans who design, train and refine their systems. Companies, on the other hand, have the challenge of developing the internal culture of employees for the ESG theme. The DoGood solution is a great example, as it is a software that drives and engages all employees in the business’ ESG strategy.
Another company that is using technology to boost ESG is Braskem, the largest producer of thermoplastic resins in the Americas and a world leader in the production of biopolymers, which, with the objective of engaging collective intelligence for the sustainable development of packaging, created and launched o Cazoolo, Circular Packaging Design Lab. The result was a dynamic, modern, intuitive and easy-to-navigate website, where potential partners can submit their sustainable projects and innovative ideas.
I have realized how relevant it is, within ESG, to work with data and analytical technologies. As an example, I mention Lynxai, a data-driven platform that makes ESG investment more efficient. The company is building a Software as a Service (SaaS) solution that creates data-driven recommendations for asset managers, banks and investment funds. The idea is to provide quantitative and qualitative information for companies to change their portfolios according to ESG standards, improving performance and reducing financial risks.
As I started researching, investigating and exploring technology and ESG in more detail, I identified a number of real use cases or potential applications. In sustainability, AI can be used to monitor climate change, optimize water and sanitation services, as well as manage and solve transportation and mobility issues. There are several use cases for IoT technology in sustainability, ranging from helping to adopt practices that minimize wear and tear and fuel use, optimizing traffic and route management, to tracking and measuring circular economy reports.
It is also worth highlighting the use of Blockchain technology in sustainability, to authenticate and certify carbon, which can produce offsets. In this case, technology is needed to more effectively measure, track, account and trade carbon credits and offsets. In addition, it is possible to create incentives and rewards to drive decentralized finance (DeFi) principles, increasing the transparency and management of the governance process.
There is no doubt that ESG needs to be the focus of companies that intend to keep growing, becoming stronger and more resilient in the future. Acting in accordance with these practices is no longer just a matter of purpose and has become essential for the sustainability of the business. According to data from Morgan Stanley Capital International (MSCI), investment funds are preferring to support brands committed to ESG.
Faced with this extremely challenging scenario, which requires rapid and powerful changes from the market, technology has become a driver, developing solutions that focus on increasing profit, while being concerned with ESG. Therefore, it has become an essential tool for organizations to incorporate effective strategies and practices.
Article originally published in Gazeta do Povo.