How can data build the roadmap for a sustainability revolution

Analyzing information for actionable insights 

To have a view of where an organization is today and where it wants to be, an organization must have a clear understanding of its data. Any sustainability journey depends entirely on data. 

In a complex industry like FMCG, proliferating a data methodology from Scope 1 to Scope 2 and Scope 3 implies a multifold increase in data points. To put this in context, a big FMCG organization has 40-50 manufacturing sites and respective co-packers; 30-50 depots; and thousands of stock lists. 

Generating data from many points is a rigorous task because the data must be accessible as well as granular. Various business processes and ERPs must be utilized in this direction. 

While the overall progress is slow, organizations are at different maturity levels, mostly due to quality data being the differentiator between mature and less mature systems. Therefore, one must have high quality, decision-centric data available that can withstand scrutiny. 

A steel company, for example, would measure profitability and course-correct if there is a change in, say, raw material costs. Some mature organizations may be in a position to look at CO2 numbers monthly, but can this data be broken down in such a way that an intervention is possible? Organizations should aim for that level of detail, which will need digital solutions. It would not be possible to intervene without a comprehensive IT platform that is geared toward ensuring that high quality and robust ESG and sustainability data is captured.

Embedding sustainability into business

Capital expenditure is one of the biggest hurdles in achieving ESG goals. Taking measures such as holding vendors to ESG standards and selecting those that meet such requirements would go a long way in achieving ESG goals without the need for a large capital expenditure. 

Similarly, traceability can be enhanced using existing tools. Dabur, for example, is using GPS to track the movement of primary and secondary suppliers to optimize service. The company also uses load optimization data to improve the efficiency in fuel consumption and logistics as a whole. With suitable adjustments, the same tool can be used to determine the distance that supplier vehicles travel. Considering the type of fuel used, this can be the basis of calculating CO2 emissions. While certain initiatives will require investment, they would also add value in the long term. 

Along with investments, organizations must also investigate product development. Packaging and product differentiation will change in the coming years. EY’s Future Consumer Index Survey indicates growing demand among customers for sustainable products and services. 64% consumers have said they are willing to change their behavior to help the environment and society. Consumers are, therefore, paving another path for ESG to be a business opportunity. This is already manifesting in the world; as Piyush Jha shared, European car manufacturers are willing to pay steelmakers a premium for ‘green steel’.

Key takeaways from the session:

1. Governance and data are key to sustain sustainability
2. All leading companies need to be on a net zero transformation roadmap led by digitization and analytics
3. Mapping of interdependencies and trade off is key for balancing the journey – we need a holistic ESG Compass for 360-degree view and direction
4. Communication framework is key with focus on business outcomes and value creation across stakeholders
5. Sustainability learning and capacity building is critical from boardroom to classroom.