Magazine Button
How does Digital Transformation relate to the concept of ESG?

How does Digital Transformation relate to the concept of ESG?

Digital TransformationGreen TechnologyThought LeadershipTop Stories

Fernando Brolo, Sales Partner at Logithink, a Brazilian technology company specialized in innovation, says that the topic of Digital Transformation has gained relevance as a result of changes in the public profile, which demands more attention from companies on environmental, social and governance issues.

Fernando Brolo, Sales Partner at Logithink

Over the years, Digital Transformation has become a basic need for all companies. Investing in technological solutions, whether to automate operational processes or to improve the performance of teams, is so crucial that it can even define the success of companies in the current scenario, marked by high investments in innovation in order to improve processes and capture the attention of an increasingly demanding public.

Also in this context of digital journey, the concept of ESG (Environment, Social and Governance) also gained prominence, an indicator that evaluates companies according to their impacts on these three axes of sustainability. The constant changes in the profile of the public, as well as society in general, have been pressuring companies to adopt unprecedented actions in the development of their services and products. As a result, Digital Transformation and ESG took the lead in discussions on new management models.

How Digital Transformation and ESG connect

The digital journey is a necessary evolution in the corporate market, there is no denying it. After all, the adoption of technological tools capable of improving the execution of processes, improving deliveries and facilitating the integration between systems and teams is crucial for companies to better adapt to the rapid changes in scenarios and targets, in addition to help building innovation-oriented organizational cultures and with broader perspectives on their real role in society.

However, recent charges have shown that just adopting new technologies is not enough. It is also necessary to be concerned with other issues such as social, governance and environmental. In other words, these demands need to be aligned and inserted in the companies’ digital journey, in order to produce effective results satisfying, thus, the expectations of their customers.

The connection exists because Digital Transformation seeks to optimize the execution of processes and improve them, while ESG aims to understand exactly what companies’ business is, how they impact the world and meet society’s needs. In this way, there is a mutual interest in meeting the expectations of the public, either through new experiences or through the attention given to topics that customers deem important.

Benefits of Digitization for ESG

Process digitization has undergone major changes in recent years. From the emergence of technological solutions for automation and data analysis, for example, companies were able to improve the entire production chain, maintaining quality and gaining more agility in the execution of processes. With that, decision making was maximized, since it started to be based on the analysis of data available in the organizations’ internal systems, fed in real time.

However, in addition to decision-making, digital technologies allowed managers to customize processes to offer the public exclusive and innovative items, without having to make their sustainable practices more flexible. In other words, the digitization of processes allows companies to increase their production without disrespecting ESG standards. Thus, these companies are able to develop customized services and products without generating additional costs for the consumer or burden on the environment, for example.

The greater autonomy in the production chain provided by digitization is directly connected with the main objectives of ESG, which are to take care of the environment; expand social responsibility; and adopt better governance practices. And technology is the best ally of companies in this process of Digital Transformation and adaptation to the norms and demands of the public.

ESG is the next corporate transformation and emerged in response to the needs of society, which requires companies to take a more active role in adopting sustainable practices against social problems that impact everyone’s lives. In this sense, the charge will be even more incisive in the coming years and companies that do not pay attention to these issues could have serious problems.

As well as the digital journey, ESG is a necessary transformation that goes hand in hand with digitization. Therefore, the connection of both allows for an increasingly strategic and beneficial action for organizations and for society as a whole.

Click below to share this article

Browse our latest issue

LATAM English

View Magazine Archive