Data and Analytics / White Paper
10 MINS READ
The SDI gap
Most enterprises are facing a gap between their sustainability strategy, objectives, KPIs, and available sustainability data and insights.
The journey of becoming a sustainable enterprise is dotted with many challenges. Sustainability data and insights is one of them. Based on the enterprise sustainability strategy, objectives, and reporting needs, there are hundreds of new sustainability KPIs coming into play. For instance, within the organization, business functions are embracing them for various processes and products across their lifecycle. From an ecosystem perspective, sustainability standards and regulations are becoming clearer and more mature. However, they are still not uniform within one country, let alone across the globe.
But what’s clear is that the transition to a sustainable enterprise is not a standalone transformation, but one that takes place as part of an evolving nested ecosystem and a connected SDI foundation. In fact, a connected ecosystem is a core requirement for a sustainable enterprise.
Sustainability is a new business imperative—it’s now an essential performance objective for organizations to stay ahead.
Enterprise data and insights have traditionally been focused on performance objectives such as cost, quality, time, and flexibility. However, in a sustainability-focused enterprise, there are different objectives, concerns, SDI needs, and stakeholders. Like a CFO who wants to understand not only the financial risks but also the environmental risks, or a CPO who needs to focus more on responsible sourcing and the sustainability impact of buying decisions. Or investors who put pressure on the organization to embrace environmental, social, and governance (ESG) investing.
Whether an enterprise is able to meet the demands of various stakeholders and where it is on its sustainability journey depends on the SDI ambition and the SDI maturity of the enterprise.
Keys to SDI maturity
Defining SDI ambition and maturity
Often defined by specific ESG goals or material topics, SDI ambition and maturity reflects the value of SDI over time. Most enterprises focus on regulatory compliance as step one of realizing their SDI ambition, followed by an emphasis on transparency, insights, and operations support. A higher SDI ambition relates to strategic decision making using real-time data and insights, along with finance control towers, to maximize financial and environmental profit.
To define an enterprise’s SDI ambition and maturity, the SDI maturity ladder can be used. It has six focus areas:
We observed that enterprises follow focus areas 1 to 6 sequentially, but they also start to learn and grow in all six areas in parallel. Focus areas 1, 2, and 3 are essential to grow value in areas 4, 5, and 6. Depending on where they are on the SDI ambition and maturity graph, the sustainability roadmap will be different for each enterprise.
Start with the end in mind but get the basics right first.
An SDI framework can help build a robust and trusted SDI foundation that accelerates the transformation to a sustainable enterprise and closes the SDI gap. The SDI framework must cover the following three phases:
Sustainable development goals (SDG) and targets of the enterprise ecosystem including ESG policies and practices.
Sustainability goals, prioritizing areas of major impact and related KPIs.
Enterprise sustainability governance identifying key enterprise stakeholders and major ecosystem partners.
SDI strategy and target operating model: This includes SDG/ESG objectives, KPIs, SDI governance, standards, business rules, processes, functions, and SDI architecture design.
SDI framework: This includes data definitions, data management, data ingestion, data storage, data processing, data enrichment, data traceability, data security, data services (analytics, visualization, reporting, applications, SDI data sets), and SDI automation.
Extend the SDI framework: This will require an SDI knowledge corpus for AI/ML, with an SDI digital twin for simulation and data lifecycle management with SDI connect (nested ecosystem data sources and data needs).
SDI products and services
SDI business alignment, ownership, and communication (vertical and horizontal)
SDI training for key users and SDI help desk setup
SDI change management, experience, and feedback loop
Live SDI services
Laying the foundation
A resilient and trusted SDI foundation is essential to accelerate the transformation to a sustainable enterprise and to close the SDI gap.
Resilience is a requisite, as the SDI foundation will mature and grow over time, adapting to changing internal and external requirements and using the learnings from the journey to drive the transformation to a sustainable enterprise. Enterprises should invest in building a trusted sustainability data and insights platform. It will form the foundation for compliance reporting, operations support, and strategic decision making, among others. New KPIs should be identified depending on new sustainability data models, data sources, and sustainability metrics.
Standardized services should be included in the SDI foundation to unlock data and insights for internal and external users. SDI services they can build, buy, join, and share. Enabling all this on a robust SDI foundation will require the right digital technologies and sustainability skillsets. SDI-led sustainability transformation must be a part of enterprises’ innovation agendas and will involve many internal and external stakeholders. Transformation to a sustainable enterprise is mostly an ‘agile add-on’ approach rather than a big bang long-term change to the landscape. The path to a sustainable future is best paved by getting the basics right first while marching on with the end in mind.