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Enterprises tackle ESG challenges via digitalization

April 17, 2025

Enterprises in various sectors confront increasing demands for environmental, social, and governance (ESG) reporting. The drive to lower CO2 emissions has prompted a shift towards improved operational efficiencies and sustainability practices.

Challenges in Accessing Sustainability Data

Organizations face significant obstacles in Environmental Social and Governance (ESG) reporting, categorized as follows:

  • Data collection methods: Manual data collection processes can result in outdated information and increased susceptibility to human error.

  • Data diversity: Legacy systems contribute to fragmented data management. According to KPMG, 47% of companies still utilize spreadsheets for manual ESG data management.

  • Incorrect or incomplete data: Many existing systems do not support the data needs required for effective ESG analysis and reporting.

These challenges complicate operational visibility and data accuracy, ultimately risking regulatory compliance and corporate reputation.

Digitalization as a Solution

To enhance data visibility and operational performance, enterprises are increasingly engaging in digital transformation. Statista projects spending in this area to rise from $2.5 trillion in 2024 to $3.9 trillion by 2027. Key advantages of digitalization include:

  • Enhanced data accessibility and inventory through breaking down silos.

  • Improved data accuracy and relevance via automated processes, minimizing manual errors.

  • Real-time insights for operations to guide sustainability efforts and efficiency improvements.

Utilization of Digital Tools

A study by GlobalData and Nokia revealed that 79% of enterprises experienced over a 10% emissions reduction post-digitalization, with 78% reporting positive returns on investment within six months. Four components are essential for achieving operational transparency:

  • Industrial devices: Integration of devices like sensors and Internet of Things (IoT) tools allows for automated, real-time data accessibility.

  • Private connectivity: Implementation of private wireless networks supports critical applications and enhances data transmission from various devices.

  • on-premises (on-prem) industrial edge: A centralized data hub facilitates real-time access to data while maintaining governance and security.

  • Applications: Utilizing software that unifies operational data leads to better insights and streamlining of analysis processes.

Artificial Intelligence (AI) is increasingly recognized as an additional component that can utilize extensive data for enhancing operational insights and predictive capabilities, although its implementation must consider environmental impact.

Path to Net Zero Through Data and Digitalization

Firm commitment to digitalization can help enterprises enhance their sustainability efforts and operational efficiency. Comprehensive real-time data is vital for progressing towards net-zero goals, facilitating ESG compliance, and supporting informed decision-making while driving down waste and energy use. Enterprises are urged to explore additional resources for deeper insights into sustainability practices.

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