What is ESG? And how can technology revolutionize this trend?

An IndustryWeek report estimates that during the lockdown in the Covid-19 pandemic, between 40 and 50% of European workers were unable to carry out their work. Some companies, however, were able to continue optimizing their production process, through a “digital twin”.

This technology uses artificial intelligence, big data and 3D modeling to reproduce the entire manufacturing cycle of a product, including its supply chain. So analysts can simulate adjustments and see incredibly accurate estimates of how they impact the process – whether it’s the end product, manufacturing structure, employee activity, or waste management.

The “digital twin” is one of the bets of the French company Dassault Systèmes to take advantage of one of the strongest trends in the current market: ESG. “Without technology, it is impossible for a company to deliver its ESG goals”, summarizes Luiz Egreja, senior consultant for business transformation at Dassault.

ESG is the abbreviation in English for “Environmental, Social and Governance” – a new management model that puts these issues at the heart of strategic decisions. It is not enough for the company to make a profit: it needs to have a positive impact on nature and people to ensure the longevity of the business and minimize financial losses.

Covid-19 was not the only recent example of non-financial risks that had brutal impacts on people’s lives and the economy. Just think of the increasingly frequent disasters caused by global warming, such as the floods that devastated Brazil this year or the current heat wave in Europe. Climate change is expected to reduce the world’s Gross Domestic Product by 18% by 2050, according to the World Economic Forum.

“The ESG agenda is the main ally to achieve a balanced world in relation to climate change and also for us to be able to promote social impact, have quality of life and deliver to the next generation a world not so much worse than the one we found”, says Ricardo Assumpção, ESG leader in Latin America South and CSO in Brazil at EY consultancy.

It’s an investment – and everyone wins

Marcus Nakagawa, professor and coordinator of the ESPM Center for Social and Environmental Development (CEDS).  - Disclosure/ESPM - Disclosure/ESPM

Nakagawa: the letter “G” requires standardized policies and rules

Image: Publicity/ESPM

“The idea is that, in the environmental issue, companies go beyond the traditional management of production and start to manage water, energy and waste as well; in the social area, that they do not deal adequately with their internal public, but that they think about the community at the same time. around it, in suppliers and everyone in contact with it; and, in governance, which has well-defined positions and leaders and standardized policies and rules”, summarizes Marcus Nakagawa, professor and coordinator of the ESPM Center for Socio-environmental Development (CEDS).

All this adds even more day-to-day variables to companies. “They need to make even more complex decisions more and more quickly, in an increasingly volatile business environment”, reinforces Egreja. “And technology is a great ally to implement these urgent changes.”

It’s not an expense, it’s an investment. “A company with ESG has less future liabilities, which represents less risk for the market”, completes Fabiano Sant’Anna, head of carbon market, ESG and agro business at Seidor Brasil, which implements intelligent technologies for process automation.

A new mindset requires new technologies

The carbon market, Sant’Anna’s focus, is a good example of how technology plays a vital role in this transformation. It does not only serve to propose ways to reduce emissions, but also to measure results, with transparency and legitimacy.

Another advantage is agility. Sandra Maura, CEO of TOPMIND, a technology solutions company, mentions 5G, a new data transmission range that began to be implemented in Brazil in July and is now available in five capital cities.

“With it, for example, we will see the greater use of drones, smart cameras and connected sensors, which will streamline logistics and monitoring processes, to support the optimization of important business activities and also human work, in addition to reducing CO2 emissions” , explains.

“Digitalization supports the reduction of manual tasks, reducing the consumption of natural resources and maximizing the pace of development of organizations”, continues the executive, who also highlights the fundamental roles that artificial intelligence, cloud and machine learning will play in the coming years.

Even small businesses can find apps, websites and platforms to jump on the bandwagon. They can help, for example, with waste management and recycling or hiring people of color, LGBTQIA+ and women.

“Many people think that technology at this level is part of the reality of few. But what we see today are things much more similar to Netflix, which do not require installation and can be accessed from any type of computer, and have very affordable prices”, guarantees Alexandre Pegoraro, CEO of Kronoos.

Rafael Tello - Cauê Diniz/Disclosure - Cauê Diniz/Disclosure

Tello, from Ambipar: a new way of thinking

Image: Cauê Diniz/Disclosure

Your company’s flagship solution is a robot that reads news and checks if the customer is related to corruption and money laundering cases – essential concerns in Governance.

However, it is worth remembering that technology alone is not enough, especially in creating a new climate approach. “The biggest barriers to the advancement of ESG are in people’s heads, with established cultures, which lead to decision making that moves us away from a more sustainable model”, says Rafael Tello, sustainability director at Ambipar, a management services company environmental.

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