A BlackRock survey found that the majority (53%) of respondents were hesitant about adopting sustainable investing due to ‘poor quality or availability of ESG data and analytics.'
Effective action isn’t just about data measurement, it’s about action too. When it comes to buildings, IoT can provide efficient solutions to fulfilling ESG criteria and operating more ethically.
The problem with ESG is proving it. That’s exactly what IoT is good for… it’ll demonstrate, with data, the improvements that an organization has made and therefore their ESG credentials.
Matthew Marson, Co-Founder of Smart Building Bootcamp
IoT and ESG: the perfect pairing?We’ve already explored the role technology plays in ESG reporting and measurement. Take a look at the ‘Tools’ section to read more about IoT’s valuable role in enhancing building performance across key ESG metrics through minimizing energy usage, improving occupant wellbeing and reporting on valuable data in real time.
Some companies are even developing IoT solutions with specific ESG metrics in mind; for instance, current performance could be analyzed in real time against local legislation or regulations.
How can the cloud help your ESG efforts?Businesses across the world are upscaling their use of cloud services to enhance their digital capabilities due its scalability, efficiency and data security.But cloud technologies can help in achieving ESG, too, by:
Enhancing ESG reporting through automation, data storage and analysis
Reducing operational costsThese benefits all make accessing, collecting, and using ESG data much more efficient and minimize the friction often associated with this process – this way, businesses can get on with the all-important task of implementing change.This all sounds great, but are there any challenges? Due to the nature of cloud computing, it can be more vulnerable to cybersecurity breaches than traditional data collection and storage methods, and can sometimes be difficult to integrate with certain systems. But establishing clear roles and responsibilities of cloud ownership within a business should alleviate concerns.
If used properly, cloud computing can be a helpful aid in achieving ESG targets, and is already in use today. A recent PwC survey in the US found that 60% of business leaders already, or are planning to, use the cloud to enhance ESG reporting, and 59% were already, or are planning to, use it to execute ESG strategies.
The acronym AI usually conjures up images on sentient robots and driverless cars, but it could actually play a useful role in helping companies achieve their ESG targets.
Although ESG is fast growing, there are still no standardized methods for reporting on vital data, which can present challenges to companies trying to disclose information about sustainability or social operations. Many businesses lack clarity around what data to collect, or be unsure of how to collect it.
Where AI can help is with ESG reporting – going far beyond the capabilities of any alternatives; using AI for ESG reporting means better quality data and enhanced analysis. And the capabilities of artificial intelligence are developing rapidly, with algorithms constantly evolving to become faster and more accurate.This means they’ll be able to digest both qualitative and quantitative information faster than ever before, simplifying ESG reporting for organizations worldwide.Machine learning is proving to be a valuable method for linguistic analysis, with engineers using this technology in entirely new ways. In Boston, a group of researchers have developed advanced machine learning to analyze previously untapped information – such as LinkedIn posts – to determine a company’s true commitment to ESG.‘We may be able to detect whether managers are ‘greenwashing’ when they talk about their firm’s ESG policy,’ said Mike Chen, Director of Sustainable Investing at PanAgora asset management.
Already, AI holds an exciting position in ESG reporting, with the potential to standardize how companies collect data and what they report on, prioritizing transparency and accuracy, and machine learning opens up the possibility of accessing entirely new datasets.
We may be able to detect whether managers are ‘greenwashing’ when they talk about their firm’s ESG policy.
Mike Chen, Director of Sustainable Investing at PanAgora Asset Management