Data management and AI identified as top priorities for sustainability reporting

90% of companies plan to increase investment in sustainability reporting in the next three years, and improving data collection and management is seen as the top priority to better integrate sustainability into business strategy.

This is according to a KPMG survey of 550 North American and European companies of more than US$500 million in annual revenue. 

The study highlights the gap between how these companies perceive themselves and how prepared they actually are when it comes to ESG reporting: 83% think they are ahead of their peers, yet almost half (47%) still use spreadsheets to manage sustainability data.

Additionally, only 18% of respondents are currently seeking third-party assurance for their reporting.

A majority (58%) of respondents plan to use artificial intelligence (AI) and machine learning to improve their data analysis and consolidation in the next three years, with 45% admitting that improving this process is the most important step in better integrating sustainability goals into business strategy.

Microsoft Chief Sustainability Officer: AI freed up 70% of sustainability team’s time

AI has the potential to be a game changer for sustainability professionals, freeing up the time they traditionally use to gather and analyse data for other, bigger-picture activities. As an example, Microsoft’s Chief Sustainability Officer Melanie Nakagawa recently noted that the tech company’s sustainability teams used to spend 70% of their time on data compilation and cleaning – time they can channel into “identifying reduction opportunities and crafting impactful strategies” now that Microsoft has integrated AI into sustainability work.

But CSOs should also be aware of the emissions and water impact of AI, work to maximise its efficiency and ask providers for transparency.

“Artificial intelligence and machine learning technologies can help organisations gain valuable insights from disparate data and make more informed decisions, but AI and ML are not a silver bullet for sustainability reporting or for setting a strategy that adds value to the business,” said KPMG U.S. Climate Data & Technology Leader Tegan Keele. “Judgement calls like which data to use, which sources to collect the data from and the type of controls that need to be in place require a cohesive strategy that should be driven by the organisation and informed by the technology rather than driven by it.”

Beyond technology, companies also plan to invest in people: 43% want to hire dedicated ESG personnel and 38% will put money into employee training and education.