Data-driven sustainability: Using data to drive change

Embracing sustainable business practices is no longer optional.

It's why leaders have turned to data-driven solutions to build resilient, purpose-led organizations with a mission to prioritize communities, employees, and the environment alongside clients.

And those choices are paying off. Prioritizing environmental, social, and governance (ESG) initiatives as part of sustainability services can drive significant competitive advantage, innovation, and financial performance. For leaders who are ready to act, a data-driven approach to sustainability is essential.

Data-driven sustainability means collecting and using data to make decisions that guide measurable and responsible business practices. Whether it's lowering greenhouse gas emissions, optimizing supply chains, or reducing waste, insights from sustainability data can power positive change while increasing profitability.

Governments worldwide have doubled down on commitments to tackle sustainability issues – especially concerning the environment. This puts budgetary and operational pressure on businesses to respond to climate change and other issues that directly affect societies and global economies.

That's why the United Nations has 17 Sustainable Development Goals covering everything from clean energy to responsible consumption. And in 2024, the G7 countries committed to eliminating unabated coal power plants by 2035, in line with the goal of achieving net-zero emissions by 2050 for the energy sector.

While prioritizing sustainability feels good from a moral perspective, it's also good for business. For example:

• Attracting investors: Companies that are proactive about ESG initiatives and practices tend to be more successful. And investors are paying attention. They're more willing to pay for ESG funds not just because of social preference but also because investing in ESG funds is a win-win in the sense that ESG funds can generate higher financial returns while also furthering social priorities^[1]
• Increasing customer loyalty: With every generation, consumers become more conscious about how their purchases impact the world around them. Customers are still willing to spend more on sustainably produced or sourced goods, even as the cost of living rises
• Building a strong workforce: Sustainability initiatives are also crucial in recruiting and retaining diverse talent. What's good for business is often good for employees, too. Many employees believe the purpose of a company should be to create value not just for shareholders but also for the outside world

The importance of sustainability in the enterprise is undeniable. But it can feel like a mammoth task to identify where your business is today and where you want to be. Data can help.

Automated data collection and analysis empower enterprises to make strategic, real-time decisions – the kind needed to achieve sustainability goals. Add in advanced technologies like generative AI, and you may identify opportunities to:

• Improve customer service
• Strengthen equality, diversity, and inclusion
• Reduce energy usage and cut carbon emissions
• Conserve resources and minimize waste

"Good health and wellbeing" is one of the UN's 17 Sustainable Development Goals, and no industry is more focused on this goal than the healthcare industry.

We put data to work on this goal for a consumer healthcare company. Regulatory compliance is essential to protecting patients, providers, and insurers. But it's a time-consuming task – research teams can spend weeks piecing together reports for in-house regulatory affairs analysts, research and development specialists, and senior leaders.

To create more sustainable ways of working, we introduced generative AI alongside the company's compliance experts to fine-tune the AI prompts that tell the technology what to search for. This means regulatory reports are produced faster than ever – which is better for employees, better for business, and better for patients.

Another example of data fueling sustainability is in the supply chain. A company's supply chain is one of its biggest sustainability risks – and one of the toughest areas to manage. But through the power of data and AI, enterprises can explore ways to reduce their carbon footprint and enable more ethical procurement practices across supply chains.

Working with Zalando, an online retailer of shoes, fashion, and beauty, Genpact accesses over 100 global databases to carry out extensive supplier risk assessments to quantify and qualify the ESG impact of Zalando's supplier base. This approach builds trust with both employees and customers that Zalando is making ethical and sustainable choices.

If you're just starting out on your sustainability journey, or if you want to strengthen your current strategy, there are three steps to take:

1. Define industry-specific goals: It's critical to take an industry-led approach. Enterprises should lay out sustainability objectives that are right for their business and industry to achieve the most significant results. To do this, you need a partner who understands your industry as well as how technology can be applied to achieve your ESG objectives
2. Build a data-driven framework: When you agree on your sustainability goals, you can use data-driven insight to create your action plan. With technologies like machine learning and generative AI, enterprises can rely on data modeling and forecasting techniques to analyze how current processes connect to sustainability goals
3. Combine human and machine intelligence: Success is not just about having the best and latest technology to drive sustainability goals. Human expertise is still critical. In essence, artificial intelligence can manage many data processing tasks, unlocking insights at speed so that teams can make confident data-driven decisions

By following these steps, purpose-led companies can support their communities, improve diversity and inclusion, and build more ethical business practices.

The business community has long viewed sustainability as a trade-off between doing what's good for the world and what's good for the bottom line. But as data unlocks exciting possibilities, that trade-off is no longer required.

With a comprehensive data-driven strategy, enterprises can meet sustainability goals to satisfy customers, employees, and investors. There's never a better time for leaders across industries to explore what's possible with ESG data at the heart of the enterprise.

[1] NBER, Investors' Willingness to Pay for ESG Funds, 2023