How data analyses help companies become more sustainable
The issue of sustainability is becoming increasingly important as awareness of the impact of human activity on the environment and global warming grows. This also has an impact on companies, which must look for ways to minimise negative effects on the environment, assume their social responsibility and grow economically at the same time. However, it is not easy for companies to act responsibly and sustainably while achieving their goals. One powerful tool that can help is business intelligence. We explain how BI software can help companies become more sustainable.
What is sustainability / ESG?
Sustainability refers to the ability to meet the needs of the present without compromising the ability of future generations. It is about the balanced use of social, environmental and economic resources to ensure long-term stability and well-being. In business and organisations, sustainability means that business practices and decisions are designed in such a way that they have a positive impact on the environment, society and the economy.
In this context, the term ESG is often used. ESG stands for environmental, social and governance. These three factors are used to assess the sustainable and ethical practices of a company.
- Environmental: This concerns the ecological footprint of a company, including environmental impact, energy consumption and climate protection.
- Social: This aspect relates to social responsibility, employee concerns, labour conditions and social impact on the community.
- Governance: Governance refers to corporate management and control, including ethical principles, transparency and responsible decision-making.
As these are very broad areas, sustainability can take many different forms in companies. For some companies, for example, it means implementing environmentally friendly guidelines, such as reducing energy consumption or using sustainable materials. Other companies focus more on their social responsibility, for example by creating fair working conditions for their employees.
Why are sustainability and ESG important?
Regardless of the respective approach, the importance of sustainability in companies is very high. This is because sustainability and ESG are not only ethically desirable but also strategically smart for companies seeking long-term success while making a positive contribution to the world.
- Long-term value preservation: Sustainability promotes long-term stability and the preservation of the value of resources, both for companies and for society.
- Risk mitigation: Companies that integrate ESG principles minimise potential environmental, social, and governance risks that could hurt their reputation and thus also on their success.
- Stakeholder expectations: Customers, investors, employees and wider society increasingly expect companies to act ethically and sustainably. A lack of sustainability can lead to a loss of trust and therefore also business opportunities.
- Innovation and competitive advantage: Sustainable practices can lead to innovative solutions and give companies a competitive advantage by meeting the growing demand for environmentally friendly and ethical products.
- Regulatory compliance: Compliance with sustainability standards and ESG criteria is increasingly required by regulators. Companies that adapt early are therefore better protected against regulatory risks.
- Customer satisfaction: Consumers today are increasingly looking for sustainable options and are not buying from companies that have a reputation for being unsustainable or even damaging the environment. As a result, sustainability is not only about being perceived favourably by customers, but also about ensuring the long-term health of a company by taking environmental and social impacts into account.
How can data analyses and BI help? ESG Business Intelligence
Companies need data analyses to establish sustainable processes and implement sustainability principles as part of their business strategy. Data can be analysed particularly easily with the help of business intelligence software. The software collects data from various sources in real time and can then be analysed there. This enables companies to gain valuable insights into their data and make the right decisions. ESG Business Intelligence can therefore take on numerous tasks:
- Data aggregation and analysis: ESG Business Intelligence can collect and analyse data on a company’s environmental impact, social responsibility and governance practices. This includes monitoring CO2 emissions, social labour standards, ethical business practices and more.
- ESG KPIs and reporting: BI platforms can analyse and report on ESG-specific metrics to provide stakeholders, including investors, customers, and employees, with transparent insights into a company’s sustainability performance.
- Risk assessment and management: Business intelligence also helps to identify and assess potential risks related to environmental impacts, social concerns, and governance issues. This enables companies to take proactive measures to minimise risks.
- Identification of opportunities: In addition to risks, BI also makes it possible to identify opportunities for companies to improve their sustainability practices and gain a competitive advantage at the same time. This can include the development of sustainable products, the optimisation of supply chains, or the strengthening of social responsibility.
- Benchmarking and comparison with industry standards: By comparing their own ESG performance with industry standards and best practices, companies can evaluate their progress and align themselves with recognised sustainability standards.
- Integration into the corporate strategy: ESG Business Intelligence helps to integrate sustainability goals into the overarching corporate strategy. This enables a holistic view of sustainability as an essential component of business success.
Integrating ESG business intelligence into corporate governance enables organisations to not only measure their sustainability efforts but also make strategic decisions based on data and insights that have a positive impact on the environment, society, and business performance.
1. Optimised use of resources and energy:
The efficient utilisation of resources is not only a key aspect of corporate sustainability, but also a significant factor in reducing costs. In this context, business intelligence plays a decisive role, as it enables companies to comprehensively analyse their operating data. For example, BI can be used to track the entire life cycle of resources, from procurement to disposal. In this way, inefficient processes can be identified and optimised. Analysing data on energy consumption, water usage, error rates, materials and raw materials makes it possible to identify bottlenecks and waste. Based on these findings, targeted measures can then be taken to optimise processes and increase resource efficiency. For example, waste can be reduced or energy saved.
2. Environmental performance measurement and reporting:
Sustainability reporting has become an indispensable tool for companies wanting to communicate their social responsibility and environmental efforts transparently. With the help of BI, meaningful sustainability reports can be created that not only fulfil legal requirements, but also meet the increasing expectations of investors, customers and other stakeholders. For example, environmental impacts can be measured precisely, social initiatives can be tracked and governance practices can be mapped comprehensively and transparently.
At the same time, the advantage of BI in sustainability reporting lies in the automation of data collection processes. This not only reduces the workload, but also minimises the risk of human error, resulting in more reliable and trustworthy reports. BI’s visualisation tools also make it easier to present complex data in easy-to-understand graphs and charts. This makes sustainability reports more accessible and appealing. In this way, BI not only enables organisations to comply with the growing sustainability reporting requirements, but also helps companies to understand, communicate and continuously improve their progress. In this way, the integration of BI into the reporting process strengthens the credibility of companies about their sustainability efforts and promotes an open dialogue with stakeholders about their social and environmental responsibility.
3. Environmental impact and emissions reduction:
Monitoring and reducing environmental impacts, especially greenhouse gas emissions, not only contributes to compliance with environmental regulations, but also enables companies to set and track climate targets and report on them transparently. BI tools provide the necessary overview to measure a company’s contribution to climate change and develop strategies to reduce emissions. Analysing environmental data can help to identify resource-efficient technologies and processes that not only reduce the company’s CO2 emissions, but can also reduce costs in the long term.
4. Optimisation of the supply chain:
The use of BI enables a comprehensive analysis of supply chain information, from the procurement of raw materials through to delivery to the end customer. As the supply chain is responsible for up to 90 per cent of all environmental impacts for most companies, a detailed analysis of data on delivery times, transport routes, stock levels, and supplier performance helps companies to identify potential bottlenecks as well as opportunities for efficiency gains. For example, companies can use business intelligence to find alternative routes or more environmentally friendly means of transport or develop consolidation strategies to reduce empty runs.
Sustainable supply chain optimisation also includes the selection of suppliers who comply with ethical and ecological standards. BI enables companies to monitor supplier performance and evaluate it in the context of social and environmental practices. This not only promotes sustainability, but also minimises reputational risks.
Importantly, the integration of BI into supply chain planning enables companies to respond more flexibly to market fluctuations and peaks in demand. Through more accurate forecasting and inventory management strategies, they can avoid overstocking while ensuring that products are available on time.
5. Developing sustainable products:
Business intelligence enables a comprehensive analysis of customer preferences and market trends. This helps companies to develop sustainable products that meet market requirements and environmental standards.
6. CSR reports and employee satisfaction:
BI tools also help in the creation of Corporate Social Responsibility (CSR) reports that provide stakeholders with insights into a company’s sustainable practices and social initiatives. For example, BI can be used to analyse social data to improve employee well-being and promote a positive corporate culture. Data on employee satisfaction and engagement can be used to improve the working environment. HR and recruitment data can ensure that diversity targets are met, creating an inclusive company culture. In addition, workplace health and safety data can help organisations take preventative measures to reduce accidents or health problems among employees.
Incorporating sustainability into the corporate strategy can bring companies numerous benefits. Not only does this appeal to customers looking for sustainable options, but it can also reduce environmental impact and save costs. From optimising resource efficiency to environmental impact and supply chain optimisation, BI provides the detailed insights companies need to make responsible decisions and achieve their goals. The integration of ESG Business Intelligence not only enables the measurement and reporting of sustainability performance, but also promotes a holistic view of sustainability as an integral part of corporate strategy.
Business intelligence software such as myPARM BIact not only collects sustainability data in one centralised location, but also enables you to make sustainable decisions and create sustainability reports. With this BI platform, companies can not only analyse data on environmental impact, social responsibility and governance, but also generate specific ESG metrics and create transparent reports for stakeholders. The software enables accurate risk assessment, opportunity identification and benchmarking in line with industry standards. By automating data collection processes and providing user-friendly visualisation of complex data, myPARM BIact helps to not only improve sustainability performance, but also to strengthen the company’s credibility in terms of social and environmental responsibility. The integration of myPARM BIact into corporate management enables companies to make data-driven decisions and achieve a positive impact on the environment, society and corporate performance.
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