According to KPMG technology report 2023 report ESG is a priority for innovation for technology functions over the next two years.
In the contemporary business environment, achieving Environmental, Social, and Governance (ESG) objectives has become indispensable for an organization's success and reputation.
Whilst setting ESG goals and purpose statements, organisations need to consider the whole ecosystem and all the stakeholders working within it.
An Enterprise Architecture (EA) function in the organisation is well positioned to steer the organisation towards its ESG goals. At its heart, EA is about systems – of aligning systems to achieve an organisations objectives and strategy.
World economic forum identifies, that digital can enable an organisation to reduce emissions by 20%, Digital and Climate (weforum.org), and a strong EA function can be the central point linking business goals to technology. The different dimensions of Enterprise Architecture across Business, Data, Technology, and Governance provide a holistic view of an organisation.
From a business dimension – a holistic view and review of strategy, existing capabilities, value chains and the maturity of each value stage and capability will inform organisations which areas to focus on from an ESG perspective.
A well-designed Data Architecture to support the business intelligence and analysis for ESG is vital and provides strong foundations for making informed decisions on ESG.
Adoption of green technologies like Cloud, green data centres as an architecture principle can be pivotal for the organisation to build green technologies and technical capabilities. EA can drive this adoption by aligning governance and change management principles to support the ESG goals of the organisation.
Cloud computing offers a diverse set of capabilities that can significantly bolster an organization's capacity to collect, manage, analyze, and report data related to ESG criteria.
Architecture in ESG Goals
Some ways leveraging Architecture can achieve ESG goals:
a) Environmental Sustainability (E)
- Green Cloud: The most significant impact of green cloud computing is in reducing the environmental footprint of an organization. By using energy-efficient data centres powered by renewable energy sources, green cloud providers drastically cut carbon emissions and energy consumption. Adopting Green Cloud Architecture can pave the way for meeting an organisation’s environmental goals.
b) Social Responsibility (S)
- Innovation Acceleration: Leveraging cloud-based tools for emerging technologies like AI, IoT, and blockchain can support social innovation in areas such as diversity and inclusion, employee well-being, and community engagement. Future focussed Architecture can enable innovation and help understand its impact on organisation e.g., new products, capability enhancements etc.
c) Corporate Governance (G)
- Data Security and Privacy: IT architecture ensures that data security and privacy compliance, are a critical aspect of corporate governance. A KPMG report on "Cybersecurity in a Hyperconnected World" stresses the need for robust security measures.
KPMG's Perspective
KPMG, as a global leader in providing ESG and Cloud advisory services, emphasizes that integrating ESG considerations into architecture is not just a corporate social responsibility initiative; it's a strategic imperative. By aligning architecture with ESG principles, organizations can pave the way for a sustainable and responsible future.
