We collect data from the “beneath” – measure on the surface – manage on the top –  and then we action accordingly…

ESG measuring and managing

It’s been 2+ years since I have started my “IT Architecture” interest in the Sustainability and ESG overall. Now we are already at COP28, and things are not really moving so good for the Planet… But I do not want to talk about COP28 (there are, and there will be, plenty of articles on this), I just want to go through my own reflections from the last two years – share some of my own “IT Architecture” learnings and thoughts.

At the first moment, when I was engaged, the common business perception of the “problem statement” – we have some reporting needs to handle…

• We need some KPIs to be measured and reported
• And this will give us the ability to manage our performance.

Simple as that – let us just climb this “small” mountain…

Figure 1. Climb the mountain

Now, it did not take much to understand – we cannot properly report if we do not properly measure.

• To be able to measure vast amount of data we have to automate measurements and perform timely data collection (as much as possible) – i.e. large Enterprise may have multiple production facilities, many operations, large transportation logistic etc.
• We do need data from our Suppliers – i.e. raw material inputs on the CO2e footprint, recycled content and other ESG relevant data.
• Beside Emission Factor matrices, accurate measurement means we need to drill down to the transactions – i.e. how much particular production line contributes to CO2e footprint etc.
• Finally, all this has to be timely and accurately calculated – i.e. its not enough to report on monthly or annual bases; if we want to provide actionable insights, we must be able to provide granular are accurate “reporting” data for shorter timeframes (daily, hourly or even per actual operation).

What we see as a mountain, it’s actually just a tip of an iceberg…

Figure 2. Tip of an iceberg

And this is just a beginning. ESG is not only Scope 1, 2 & 3 GHG emissions, or GRI reporting – it is much more. And then if we talk about Sustainability element of ESG – it is not only operational Sustainability, there is financial Sustainability and Green Ledger as well – where financial Sustainability is being very “vivid” with constant changes of various regulations and legislations in many countries (from Plastic Tax and EPR to EU Taxonomy and CBAM and much more).

Things are very dynamic…

Final thoughts…

The fact is – Sustainability is not only about reporting:

• From one side Sustainability, as a concept, it is beyond any Company and Country, it is beyond any corporate operations and financials – it is a philosophy of living…
• And if we observe strictly from the corporate side, Sustainability is the way how we (in our Enterprise) will establish ourselves as a Sustainable Intelligent Enterprise – meeting all regulations (or surpass it) and provide value for our Customers and Stakeholders…

Does not matter whether we aim more toward the first or the latter one, in both cases, we need to build the system which will support actionable insights. This “system” includes Suppliers, Manufacturers, Wholesalers, Retails, Customers (actually, everyone in the product/service lifecycle-chain) – but also Vendors and System Integrators (as partners) – and above all Governments, NGOs and other legislators (in general).

The key word here is – partnership.

Building for the Sustainability, or building the Sustainable Intelligent Enterprise, requires more than just “IT Products” or “IT Solutions” – it requires establishing the partnerships; partnerships for the success.

And if we succeed, we all win…