The current business landscape proves that harnessing the power of data is essential not only for driving success but also for promoting sustainable practices and positively impacting the planet.

Dean Wolson, country manager: Lenovo Infrastructure Group South Africa

Africa, like many other continents, is witnessing a growing emphasis on Environmental, Social, and Governance (ESG) considerations within organisations. By leveraging data-driven approaches, businesses can make informed decisions and take meaningful actions towards achieving their sustainability goals.

In uncertain economic times, it can be tempting for business leaders to put ESG initiatives on the back burner, and the past year has highlighted just how real a problem this is. While 71% of CEOs believe it is the responsibility of the company to ensure that its ESG policies reflect the values of their customers, ESG initiatives went from being the number one organisational priority to being third.

This is according to research by Google Cloud, which shows many executives are talking of more pressure to deliver revenue instead. According to McKinsey, ESG strategies can affect operating profits by as much as 60%, there are also practical challenges that companies face such as skills shortages, rolling blackouts and surging inflation.

In the past, it was easy to fall into the trap of imagining that ESG targets were separate from a company’s data strategy, with one handled by sustainability officers and the other by IT- but in fact the two are inextricably linked. Having a robust data strategy can deliver results for both businesses and the planet.

One of the key findings of Lenovo’s recent Data for Humanity research highlights that executives believe data will play a crucial role in helping enterprises deal with global crises such as climate change. More than two-thirds (70%) of organisations are already using data to achieve both ESG and financial goals.

The findings also show that in the most successful organisations, the IT team works closely with business teams to achieve both financial and ESG goals. A mature data strategy and a move away from siloed thinking are the cornerstones of an ESG strategy fit for the 21st century.

Identify where problems lie

Grappling with the problems of sustainable IT can be daunting. Enterprise technology accounts for around 350 to 400 megatons (million tons) of carbon dioxide-equivalent gases every year, according to an analysis by McKinsey. This makes up around 1% of total greenhouse emissions globally. According to PWC, only half 50% of sub-Saharan African companies are working on or have implemented a data-driven, enterprise-level strategy for reducing emissions and mitigating climate risks, compared to 65% globally.

Business leaders must use the data at their fingertips to take an overview of where their emissions come from, and what can be done to remedy this. Sometimes, these answers may seem counterintuitive. McKinsey’s research shows that end-user devices, such as laptops, smartphones and printers, are responsible for more emissions than on-premise data centres, generating between 1,5-times and 2-times the amount.

Engaging with data offers CIOs the information they need to make the big decisions, both in the data centre and in the office: for example, data can empower CIOs to upgrade to less power-hungry servers, or zero in on end-user devices that aren’t needed.

For business leaders, data-enabled sustainability decisions don’t need to be painful ones. Simple methods, such as buying IT equipment in smarter packaging which reduces the amount of paper and plastic used to ship products, can help.

Reaping the rewards

In the race to net-zero, companies, consumers and governments must work together: everyone’s future depends on it. Corporations have several important roles to play, from ensuring consumers are educated about climate change and what needs to be done to address it, to working closely with other businesses and governments, sharing data where needed to hit important goals in the decades to come.

This is not a battle that can be fought alone. Companies have a duty to influence both consumers and others in their value chain, leveraging their data to help in this: from these seemingly small actions, global change can grow.

Engaging proactively with data is central to this. The Data for Humanity report highlights the fact that business leaders who engage with data reap significant rewards, although too few currently do so. Companies which have engaged robustly with data, categorised as ‘Data Leaders’ and accounting for 15% of the companies surveyed, are far more likely to have made progress towards their ESG goals.

Most Data Leaders (89%) have made significant progress towards ESG goals, compared to just a quarter (23%) among ‘Data Followers’. Four in five ‘data leaders’ (78%) have also increased revenues.

The report finds that awareness of environmental and social issues is high. Business leaders recognise the potential of data as an enabler to deal with such ESG issues, believing that it will be highly important in dealing with issues such as global warming (60%) and income inequality (55%). But just a third of executives (33%) have a plan to tackle global warming within the next three years – and even fewer (18%) are setting out to deal with income inequality.

Sharing data with collaborators and partners is also widely recognised as important in achieving ESG goals. Almost half (43%) of business leaders say that they are sharing data with external partners and organisations to help support environmental initiatives. This is vital, as reducing carbon emissions is not something that can be done alone. In today’s global economy, no large company ever works in isolation. Many companies are already working together to take climate action.

According to PWC 52% of sub-Saharan African companies anticipate a moderate to large impact from climate risk on their cost profile over the next year, compared to 50% globally. These costs include insurance liabilities and financial outlays to comply with new regulations.

Long-term goals

Mastering data can offer the insights business leaders need to frame their longer-term climate ambitions – including their emissions goals over the next decades. The Science Based Targets initiative (SBTi) offers organisations a benchmark to measure their future progress on climate issues. The SBTi Net-Zero Standard is the first to be backed by science, and is already used by 2,000 organisations worldwide.

Companies as diverse as Capgemini SE, H&M, and Schneider Electric, as well as Lenovo, are among the first group of organisations who have committed to at least some of the SBTI goals, publicly sharing how they are taking action as part of an ambitious plan to accelerate the global economy to net-zero emissions.

Sustainability and the future

As enterprises become more advanced in using data, they are more likely to use it for altruistic purposes. This shows why organisations need to move beyond siloed thinking when it comes to ESG, and ensure that IT has a seat at the table in discussions around environmental and social issues.

Engaging with the data at their fingertips is the first step along the road to achieving sustainability goals – allowing business leaders to set clear goals, measure results, and set out on their ESG journey with confidence.

Data is key to making the right decisions – both for the business, and for the planet.