Implementing ESG strategies in business is critical to building a more sustainable future. The actions carried out today will impact the development of society in the following years, so it is essential to address environmental, social and corporate governance criteria in organizations, from a comprehensive and holistic approach.
ESG Criteria
ESG is a strategic initiative that must be at the core of companies. The levers we believe should be activated within each of the elements E, S and G to transform companies are:
Environmental (E): Including issues such as protection of biodiversity or deforestation, net zero objectives, emission reduction, use of renewable sources, low-emission fuels, and new energy vectors such as hydrogen, among others, and decision-making considering the relationship of activities of companies in the environment and climate change.
Social (S): Traditionally, social issues carried less weight in comparison to criterion E, however, Covid has increased its relevance due to company’s activities in response to the pandemic that impacted the community such as new ways of working, through hybrid models- remote and in-person- that adapted to the needs of workers, in addition to gender equity and diversity, and the inclusion of local communities in decision-making.
Corporate Governance (G:) The decision-making of shareholders, the board of directors and the executive team of companies, has an increasing impact on the entire ecosystem (investors, employees, customers, and community), therefore the importance of transparency, ethics, and board structures that include diversity, anti-corruption and fraud measures, among others is analyzed.
ESG goes beyond a series of steps and tries to adapt to the new disruption that has arisen in the world where all agents of the ecosystem and the regulation itself demand sustainable solutions that add value and growth to society and the industry, resulting in companies’ ability to cope with health, environmental, social and economic crises, not only internally, but as agents of transformation.
Twin Transition Paradigm. Companies that are not Sustainable and Digital will Disappear
In order to tackle these challenges, we need to understand that we are currently immersed in two revolutions through two new waves: digital transformation and sustainable transition. Both actions must be synchronized and promote the double transition or "Twin Transition" to ensure fair, sustainable economic growth with society and the environment. Both transformations together form a robust opportunity for new businesses and markets.
In this sense, digitalization must be a key factor to achieve sustainability, since both elements must go hand in hand in the creation of impact solutions. It is necessary to utilize the technologies we have to improve organizational processes and structures for a more equitable and sustainable social development.
At NTT DATA we believe in the new paradigm of "Twin Transition", in which the terms define the future of our production model: digitalization and sustainability. Companies that are not able to integrate these two transformations within their businesses will have difficulty surviving in the market.
ESG Strategies as an Opportunity for Growth and Positive Impact
By applying ESG criteria, companies can obtain better results and a good positioning in the industry because they seek to generate a positive impact on society.
In addition, regulatory aspects such as climate taxonomy, with the aim of achieving climate neutrality derived from the Paris agreement where more than 200 countries committed to addressing climate change and its negative impacts, means that, in some regions such as the EU, regulations have been implemented to encourage private investment for the activities necessary to achieve that neutrality.
Therefore, it is essential to understand the maturity of the ESG strategy of each organization and client, understand the current context and where it is now. In this way it is possible to define objectives, actions, levels of awareness and levels of commitment that the organization already has and the level it wants to achieve.
The purpose of our work will always be for companies to recognize and identify areas of opportunity so they can not only be references, but agents of a sustainable and digital transformation being "Twin Transformers".
Commitment to society, the environment and governance is not new. ESG strategies have become a fundamental part of the operation and management of any organization; however, there is still much to develop on these issues at a corporate level, so it is essential to continue to promote relevant aspects such as social and environmental impact, diversity, inclusion, governance and economic growth.
At NTT DATA we not only offer a systematic, end to end, ESG approach along the value chain for our clients, but we firmly believe in it and apply it daily in our company through the 2030 Sustainable Development Goals, among others. From analysis to execution, we help organizations develop an ESG and Net Zero Strategy, eco-innovation in products and services, evaluating operations and the value chain, the organization, people and talent, as well as risk analysis, monitoring and seeking financing based on ESG criteria, to create value in the business.