ESG as a Measure for Evaluating Company Performance
Digitization and Sustainability are closely interconnected, and they inevitably have a financial impact. Is it good or bad?... That depends on the presence or absence of a Sustainability Strategy within the company. But one thing is certain: the quality of ESG KPIs has cross-cutting implications for the company, spanning from Sales and Procurement costs to the company's financing capabilities.
If the CFO disregards Sustainability or treats this issue with negligence, it can lead the company to bankruptcy or to negative findings in the annual audits.
Business and Social Impact of Industry 4.0
The 4th Industrial Revolution arrived, and fast. The so called "Industry 4.0" is powered by Artificial Intelligence, which rise is as important as the invention of the wheel. It represents a new world of business opportunities, or a risk for companies who don’t embrace the necessary culture Transformation.
Industry 4.0 impacts Business and Society in three dimensions: Finance + Sustainability + Digitalization.
Blockchain - a key subject of Business Strategy
Great brief explanation by Peter Van Valkenburgh about blockchain and bitcoin.
Blockchain and Metaverse, together, are presently at the forefront of Business Strategy. They are key for Sales, Marketing, Supply-chain and Finance. A good use of it can be an important driver to exponentialize the company´s ESG KPI. On other hand, ignoring its benefits may lead company to lose competitive advantages vs competitors.
Banks like Bison Bank and BPI, as well as brands like Nike and Kellogg are some examples of companies already using these new technologies as part of its strategy.
ESG Compliance
Although Sustainability is far more than just compliance and reporting, this shows the wind of change brought permanent news to the business models across all industries. ESG is now a non-optional "must have". The approach "Nice to have" is not enough anymore. Its critical to explain to all companies the practical meaning of this new reality, otherwise they will not survive. PPP, Double Materiality and Digitalization, are the "new normal" now.
The new Business models are circular and digital.
Portuguese malls and supermarkets at the forefront of the new Business Models of the circular economy.
The Textiles is one of the industries where the business model is changing more dramatically, with huge benefits to Sustainability. Don´t buy clothes, rather pay for using it, again and again... As fashion itself is made of repeating patterns, so why shouldn't we re-utilize clothes, instead using them once and then send it to the garbage ? (the Ocean is full of garbage... )
Now, if distributors, malls and supermarkets manage to use Machine Learning models and Artificial Intelligence to follow up on sales: promotions will become more effective, forecasting will be more accurate and the company will be more profitable, despite the challenging economic momentum …
A magic formula !
Sustainable Finance on its way to become the only way...
Innovation and Sustainability: Data Science allowed new metrics
Innovation, Social responsibility, carbon footprint.... now we can measure it all.
Data Science algorithms and Big Data captured trough API and IoT brought the development of metrics for benchmark and performance, allowing compliance with the new frameworks (e.g., European Union taxonomies) and enabling strategy design for Sustainable Finance.
We can only control what we can measure.