US companies plan to keep investing in digital initiatives for sustainability and ESG despite political shifts and regulatory changes, a new report by Information Services Group (ISG) has found.
ISG’s latest Provider Lens Sustainability and ESG report found that brands are increasingly leveraging digital solutions to enhance environmental and social sustainability, even as federal regulations are likely to be pared back under the Trump administration.
Maintaining brand value, mitigating risks, and driving cost savings are among the reasons cited by businesses for remaining on an ESG-focused path.
‘When, not if’
“Companies in the US recognise that mandatory ESG reporting is a matter of when, not if,” commented Matt Warburton, digital sustainability lead at ISG. “Achieving accurate reporting will require both investment and time.”
AI, machine learning, and IoT are playing an increasingly important role in driving sustainability initiatives in asset-intensive industries such as power, utilities, manufacturing, and transportation, ISG added.
The emergence of generative AI has sparked optimism for its potential to streamline ESG reporting, however to show a return on investment, these tools will need to be trained on specific use cases.
Digital transformation
The report also notes that US firms are keen to integrate sustainability into broader digital transformation efforts, with sustainability elements typically representing 5% to 10% of total project costs, in turn driving greater financial efficiency.
“Many sustainability initiatives lower costs and help companies retain customers and attract employees,” added Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Those effects multiply the benefits of digital transformation.”
Some 100 companies were evaluated as part of the study, including Accenture, Capgemini, Cognizant, HCLTech, IBM, Infosys, TCS, Wipro, Deloitte, EY, Microsoft, NTT DATA, PwC, BCG, CGI, Cority, EcoVadis, ERM, Kyndryl, LTIMindtree, McKinsey & Co., SAP, Schneider Electric, VelocityEHS and Wolters Kluwer. The full report can be found here.
