IT architecture as an ESG accelerator

A business excellence approach for ESG-enabling IT architecture

Content
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01 Abstract Page 03 02

02 The Importance of ESG IT Architecture Page 05 03

03 A Holistic Approach Page 08 04

04 The Way Forward Page 27 05

05 Glossary Page 29 06
05

06 References Page 31 07

07 Contacts Page 32

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Abstract
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01 | Abstract

Environmental, Social, and Governance (ESG) is an “Data are the lifeblood of 01

endeavor that cuts across all units and teams of
decision-making.”
an organization. Information technology is key to
translating ESG strategy into daily business and to 02
United Nations Secretary-General’s Independent
making overarching strategic decisions. Starting
Expert Advisory Group on a Data Revolution for
at the backbone of an organization, the concep-
Sustainable Development (IEAG) 03
tual design of an organization-wide, cross-busi-
ness and therefore holistic IT architecture driven
by its ESG strategy facilitates measurement, 04
management, and visualization of strategical and
operational processes. To support organizations
05
in upgrading their IT architecture, this whitepaper
discusses a use-case-agnostic ESG IT architecture
approach consisting of 5 specific steps. It outlines 06
05
a way forward for defining and deploying custom-
ized ESG IT architecture so that organizations can
take data-driven, timely, and effective business
07
decisions with ESG aspects at the core.

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The Importance of
ESG IT Architecture 01

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02 | The Importance of ESG IT Architecture
Decision-making is the foundation for compre-
hensive ESG transformation. The basis for deci-
sion-making is data, which leads to a substantial
rise in demand for ESG-related information.1 An
organization’s IT can enables correct and timely
decision-making by providing analytics and
insights on emissions and natural and human
resources, across the entire value chain. This
yields improved investment decisions, risk mitiga-
tion, an optimized value chain, resilience building,
and new customers, lenders, and investors.2,3,4
IT strategy plays a pivotal role in delivering on
ESG-related targets. While many organizations
have some level of insight into their current ESG
impact, an ESG IT Architecture can enhance their
ability to measure, monitor, and manage ESG
impact to uncover other areas such as waste
reduction, carbon footprint management, bio-
diversity, and social impact.5 It is key to reaching
wider ESG-relevant organizational goals and
ambitions.
Organizations must act now and face the chal-
IT Architecture ... 01
lenges to prepare for the future and tap the full
… is a formal description of an organiza-
long-term potential of ESG management and
tion's IT application, data & technical infra-
its social, economic, and ecological benefits.6,7 02
structure, providing information about the
Table 1 highlights some of these challenges8 and
structure of components and their interre-
opportunities of IT architecture.
lationships. 03
Only with a well-designed and correctly imple-
mented IT architecture organizational ESG ESG IT Architecture ... 04
strategy and business process integration can be … is an organization-wide, cross-business
steered successfully. and therefore holistic IT architecture driven
by an organization's ESG strategy. 05
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02 | The Importance of ESG IT Architecture

Tab. 1 – Common ESG-related challenges during ESG transformation

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Challenges Solutions via IT Architecture

03
Anchoring ESG in Lack of anchoring of ESG strategy in organizational ESG IT Architecture enables cross divisional cooperation
Organization processes & structure across the entire organization and value chain

04
ESG Lack of indicators to measure, evaluate and Defines what and how to measure via the
Measurement monitor ESG impact and targets ESG IT Architecture
05

ESG Lack of ESG parameters anchoring in business Integration of ESG management and governance
Management processes to enable ESG-based decision making for each use case via digitalization 06
05

Enables comprehensive E2E real-time data collection, reliable

Data foundation Lack of quality and granularity of ESG data
data processing, assurance, and consolidation 07

Capability Lack of transparency with regard to business Provides information about current capabilities by mapping
Mapping capabilities and their relationship with ESG business capabilities against the existing IT Infrastructure

ESG Gap Identifies and closes gaps, and provides a structured way to
White spots in transparency of ESG performance
Analysis integrate further data sources in existing IT Architecture

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03

A Holistic Approach
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03 | A Holistic Approach

To support an organization-wide ESG transforma- Figure 1 shows an organization’s typically large

tion by enabling management and steering, the
IT implemented must provide data, metrics, and
ESG performance insights.9 A holistic approach
to IT architecture is inevitable to enable organiza-
tions to achieve their ESG goals.
01
variety of capabilities based on its business and
ESG ambitions. Below business capability map
can be understood as an exemplary depiction 02
of the requirements for IT architecture.
03

Business Capability Map ... 04

… depicts the complexity of an organization
and clearly shows what business activities
are needed to reach its objectives. It pro- 05
vides a basis to structure responsibilities
and to identify focus areas for action
06
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03 | A Holistic Approach

As the graphic indicates, gathering and releasing Fig. 1 – Enterprise Value Map
01
ESG information in a holistic manner may require
Stakeholder Value

data collection from multiple systems managed

02
Operating Margin Asset Efficiency Expectations
by different departments or individuals, which
Environment Social Revenue Growth

can create challenges in sourcing, collecting, vali- SDGs and Price PPandE Inventory Receivables Company External
Climate and Human Labor Realiz- Income and
Volume SG&A COGS Strengths Factors
Biodiversity Rights Standards ation Tax Payables

dating, analyzing, and reporting ESG information.

Emission Scope 1 No Zero Acquire Retain and Strengthen Improve Improve Improve Improve Improve Tax Improve Improve Improve Improve Improve 03
Organizations must apply a holistic ESG approach
Reduction Scope 2 Poverty Hunger New Custo- Grow Current Pricing Customer Corporate/ Development Logistics and Efficiency PP&E Inventory Receivables Managerial Execution
Scope 3 mers Customers Interation Shared and Service Efficiency Efficiency and and Gover- Capabilities
Efficiency Service Production Provision Efficiency nance Effect-

to their existing IT architecture. A reference IT

Efficiency Efficiency Efficiency iveness

architecture must be developed to describe the Bio- Water Good Quality Product Product Supply and Improve Improve Improve Improve Improve Improve Improve Improve Improve Improve
04
diversity Consump- Health and Education and Service and Service Demand Customer Corporate Development Logistics and Income Tax PP&E Inventory Receivable Managerial Execution

scope of the technologies and products or ser- tion Well-being Innovation Innovation Manage- Interaction Shared and Service Efficiency Efficiency Efficiency and Payable and Gover- Capabilities
ment Efficiency Service Production Provision Efficiency nance Effect-
Efficiency Efficiency Efficiency iveness

vices required for the realization of system func- 05

tionalities derived from the business capability Sales Real Materials Merchan- Equipment Work in Accounts, Business Partnership
Waste Soil Gender Clean Marketing Account
Estate dising and Process and Notes and Planning and Collab-
Water Manage- Equality Water and and Sales Manage-
Systems Raw Interest oration
ment Sanitation ment

map, recommending structures and options for

Materials payable

integration of IT products and services. 06

05

Reference IT Architecture ... 07

… provides a structure and categories of
technology necessary for the enablement of
functionalities to reach specific objectives;
it therefore facilitates the definition of a
specific target IT architecture.

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03 | A Holistic Approach

A critical success factor for the enablement of
ESG analytics capabilities is their tight integration
into organizational IT strategy and IT architecture.
It is important to emphasize that “ESG IT archi-
tecture” as described in this paper implies the
integration of ESG capabilities in the entire organ-
izational IT architecture and does not refer to a
parallel, stand-alone IT architecture for ESG-re-
lated business activities. The aim is the holistic
integration of ESG functionalities into end-to-end
business processes.
An end-to-end ESG transformation can be real-
ized by following a dedicated 3-phase approach
(figure 2) consisting of “Activate & Prioritize”, “Lay
the Foundation” and “Transform & Embed”. While
the focus of the first phase is understanding ESG
01
strategy and prioritizing topics and use cases, the
focus of the second “Foundation” phase is to real-
ize the goals of the ESG strategy, the prioritized 02
topics, and the built use cases. The developed
concepts and defined structures are then imple-
03
mented in the “Transform & Embed” phase.
04

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Knowledge Nugget
06
05

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CIOs and sustainable
technology | Deloitte Insights

Achieving UN Sustainable Development

Goals With Digital | Deloitte UK

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03 | A Holistic Approach

Fig. 2 – The three phases of ESG transformation

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02

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1. Activate & Prioritize 2. Lay the foundation 3. Transform & Embed

04
Defining a reference IT architecture lays the foun-
Target IT Architecture
dation for an ESG transformation by providing a 05
Target IT architecture is an organization's
framework for the specific target IT architecture
specific realization of the reference IT
to enable ESG business capabilities. It is there-
architecture through best-fit technologies.
fore allocated to phase 2 and is its centerpiece. 06
05
It demonstrates the post-transformation IT
This phase can be broken down into 5 steps,
Architecture of an organization, including
as depicted in figure 3, and is further described 07
application integration & data models,
below as a step-by-step guide to defining a refer-
down to the last detail.
ence IT architecture.

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03 | A Holistic Approach

Fig. 3 – Five step approach for holistic ESG IT Architecture

01

5. 02
Activate & Prioritize
2. Defining Reference IT
Defining Processes & Data Models Architecture
Describe process for data generation and Define what the future 03
validate with required steering dimensions architecture should look like

Transform & Embed 04

05
3.
Aligning Organization &
Data Governance 4. 06
05
ESG risk integration & Data Perform Technology Gap
governance & Security policies Analysis

1.
Identify which components of
the existing IT Architecture 07
Create the ESG Metrics can already be used to
Specification achieve ESG demands and
Define ESG Data and information where the capability gaps are
demands based on use cases

Lay the foundation

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03 | A Holistic Approach

1. Create the ESG Metrics Specification is important and should be done with care. ESG measures via defined metrics, and to enable
targeted control and monitoring, it is important
01
The first step in defining a reference IT architec- Particular attention must be paid to consistency
ture is to identify an organization’s strategic fields in the collection of metrics, and to compliance to consider the complete capability map and
of action, which includes a breakdown of strategic with clearly agreed definitions regarding specifi- its impact on various aspects of ESG ambitions 02
requirements, goals, and ambitions into opera- cations, reporting frequency, subcategories, and (figure 4).
tional steps. An overarching catalog of metrics calculation logic. To ensure the controllability of
03
with definitions should be created by translating
Fig. 4 – Use case examples for continuous ESG data measurement and management
the ESG strategy and its associated targets and
requirements into measurable and manageable 04
Decarb
ESG metrics. The measurability of corporate ESG nizatio
o- Human
n Rights
impact is a major challenge for organizations in
at
e di Bio
s
ee hip 05

Se
im ve - oy rs
the context of ESG, so defining these metrics pl de

cu
Cl rs
ity

ri
Em Lea

ty
d
an

06
05
Data as a Foundation

Business
Ethics
Measure Manage
Data and metrics are the foundation for Heal
th
Circu

Safe &
ESG strategies, management, and compli-
ty
07
larity

ance. “If you can´t measure it, you can´t

improve it.” – Lord Kelvin ty
Ca ui ble
r
Si bon Eq aina hain
nk Sus st C
s tain Su ply
Physical Fina able Su
p
Risk nce

Each tile/block represents a metric which can be a measurement element for

actuals, plans, forecast, targets with different dimensions

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03 | A Holistic Approach
2. Defining Processes and Data Models
After creating the ESG metrics, the next step is
to specify process descriptions for data genera-
tion and collection. The process definition must
include any business activities containing relevant
data, the data delivery process, and update rates,
etc., on an organization-wide scale. This step
must be validated in coordination with various
external and internal stakeholders, business
units, and committees. The resulting metrics,
information elements, and measurement dimen-
sions then must be documented in form of an
information model.
To close the loop, the defined information
Information Model 01
model must be converted into a data model as
An information model formally describes
depicted in figure 5. The data model contains the
a problem domain without constraining
measurement objects, their relationship to one 02
how that description is mapped to an
another, and their mapping to the technical fields
actual implementation in software. It is a
(if known). To provide transparency, complete-
representation of concepts, relationships, 03
ness, and consistency across the organization,
constraints, rules, and operations to specify
steering dimensions and steering objects must
data semantics. It provides sharable, stable,
also be part of the data model. Moreover, appro- 04
and organized structure of information
priate master data objects must be specified and
requirements for the domain context.
integrated into the data model along with defined
05
calculations, planning, and simulation logics.
Data Model
A data model is an abstract model that 06
05
organizes data elements and standard-
izes how the data elements relate to one
another and to the properties of real-world 07
entities.
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03 | A Holistic Approach

Fig. 5 – Defining process and data model

01

Detailed ESG metrics specification Process description, data collection and validation Information Model
02
exam exam Information Management
plar plar
y y
Elements

Indicator +
Analysis-
=
Information- 03
dimension element

Examples

New Legal Entity New Hires per legal 04

Hires Gender entity for geographic
Location location in
Year calendar year
05

Steering Dimension
06
05

n
tit

er

tio
En

nd

ca
07

s
l

Ge

ire
ga

Lo

Steering Objects
Le

H
ew
N
FTE

le
op
Pe
ESG data cube

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03 | A Holistic Approach

The details of the steering concept, including

01
the interfaces between content, processes and
systems, and the simulation mechanisms must
be aligned with one another. This will not only 02
provide the necessary insights into progress on
ESG targets, but enable organizations to manage
03
countermeasures and ESG-related improve-
ments. This concept will be refined as part of
data governance, discussed in the next step. Nev- 04
ertheless, the definitions and priorities resulting
from the process and data model definition serve
05
as functional requirements for the IT architecture.

06
05

07

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03 | A Holistic Approach

3. Aligning Organization and Data

01
Governance
The main objective of data governance is com-
pliance with regulations. But there is more to Knowledge Nugget 02
it. Data governance enables organizations to
unlock the full potential of data-management and
03
analytics capabilities to make the most effective
use of their data. As a set of quality control pro- 1. Data Governance 2. Future of Controls
cesses, data governance supports organizations Data Governance - Deloitte
Point of View (PoV)
December 2022 Deloitte UK Deloitte 04
in holistically managing, using, improving, main-
taining, monitoring, and protecting data. Data
05
governance provides a framework to manage the
“Data governance is a system of decision rights and
quality, access, privacy, and security of an organi-
zation’s data. It enables organizations to manage accountabilities for information-related processes, 06
05
their data proactively, thereby ensuring that their executed according to agreed-upon models which
data is fit for purpose. A data governance frame-
describe who can take what actions with what 07
work is depicted in figure 6.
information, and when, under what circumstances,
using what methods.”
Data Governance Institute10

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03 | A Holistic Approach

Proper ESG data governance and its organiza- Fig. 6 – Data Governance
Deloitte Data Governance Framework Data Governance Objectives
01
tional alignment, reliability, and security are key
to the quality of any ESG data used to achieve an
organization’s full potential during its ESG trans- Enhance analytics capabilities
02
formation.

An ESG data governance strategy which, most 03

Co
Reduce operating costs
importantly, is aligned with organizational data

nt
in
and overall governance strategy must be defined, Governance Policies &

uo
Metrics Principles 04

us
l
heeding the data governance framework as

ode
Reduce complexity

Gov
follows:

entation M

ernance Improv
Data
Governance 05
Tools & Strategy Roles & Ensure regulatory compliance

plem
Techno- Responsi-

Im
logy bilties 06
05

em
Improve data quality

e
Processes

ntn
07

c
e

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03 | A Holistic Approach
Policies and Principles
Policies are binding guidelines for the different
data management functions that data govern-
ance oversees. It is important to entrench ESG
data controls to ensure compliance with drasti-
cally changing regulatory requirements and mar-
ket needs (such as Germany’s aim to get 100% of
energy from renewable sources by 2035).
Roles and Responsibilities
Roles and responsibilities for ESG data should
be defined in an ESG governance model by
setting up a chain of decision-making bodies and
ensuring alignment between IT, business, risk,
compliance, and other organizational functions
around ESG. This cross-functional steering should
be analogous and closely coordinated with the
organization’s Governance, Risk & Compliance
(GRC) function. Clear accountabilities on all levels
accelerates progress while controlling risk.
Processes Governance Metrics
01
To enable effective management of data-gov- To measure the success of ESG data governance
ernance operations, data-governance processes against its objectives, ESG data-governance
must be defined based on the needs of the ESG stakeholders should agree on a set of metrics 02
data and ESG data-governance stakeholders, as that reflects the overall business objectives. The
well as of organizational functions. definitions of ESG data-governance metrics must
03
include corrective improvement measures.
Tools and Technology
The existing IT landscape must be evaluated for
its GRC capabilities and its suitability to fulfill fur- 04
ther ESG data-governance requirements. If GRC
technology is not already part of the IT landscape 05
or existing tools have shortcomings, it must be
highlighted and covered in the next step of the
five-step approach. Evaluation and selection of 06
05
technology must ensure organization-wide con-
sistency of the tool and data landscape. 07
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03 | A Holistic Approach

4. Technology Gap Analysis
Existing IT architecture must be analyzed based
on the aforementioned steps. This includes which
of the required processes and data models have
been addressed already, whether these pro-
cesses and data models are already digital, and
which technologies are needed to incorporate
the target business and data models.
Best practice for performing such analysis is to
map the requirements derived from target busi-
ness capabilities against existing technologies.
For example, whether the proper tracking tech-
nology for recycled and incoming materials of an
organization involved in recycling is available and
precise enough. Similarly, a construction business
should have a human resource management sys-
tem integrated with health and safety manage-
01
ment. All differences between the requirements
derived from target business capabilities and 02
existing technology capabilities must be docu-
mented as gaps and addressed in the reference
IT architecture. 03

A general obstacle on the road to end-to-end

Fig. 7 – Technology gap analysis 04
digital processes is technology that has not yet
been implemented. This may include platforms, As-Is Assessment Gap Analysis Conceptually ideal state 05
services, or applications. A complete analysis
must determine which data sources would
require which kind of applications and services, 06
05
and if the platforms are suitable to host those
applications and services (figure 7). There must Procedure
Map the ESG metrics,
Results
Differences between 07
also be analysis of whether the functionalities required object
classes, workflows etc.
existing technology
capabilities and target

of available technologies are being used to the against required

source applications,
capabilities are
documented as Gaps

fullest already or if further functions could be services and platforms and reflected in the
reference IT Architec-

leveraged. ture

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03 | A Holistic Approach

5. Defining Reference IT Architecture Fig. 8 – The four layers of an IT architecture

01
Once there is an understanding of ESG business
requirements, corresponding ESG reference IT
architecture can be derived. Figure 8 shows the 02
Layer
layers of an IT architecture that forms the basis
04
for an ESG IT reference architecture as illustrated Monitoring &
Steering
03
in Figure 9.

04
Layer 03
Data Analysis

05
Layer 02
Data Consolidation &
Aggregation
06
05

Layer 01 07
Data Generation &
Collection

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03 | A Holistic Approach
Layer 1 Data Generation and Collection
connects to transactional sources and forms the
basis for data consolidation by extracting, trans-
forming, and loading data into the data consolida-
tion and aggregation layer (Layer 2). Layer 1 also
determines the degree of automation of data
transfer via the respective interfaces, depending
on frequency and type of data collection. Based
on the data model defined above, several existing
source systems might have data points required
for ESG metrics as well. The source systems may
need to be enhanced or deployed due to unavail-
ability of data. In any case, integration of ESG and
non-ESG source systems is inevitable to reap the
benefits of an end-to-end business process.
Layer 2 Data Consolidation and Aggregation, truth” for all organizational ESG-related informa-
01
also known as the data integration layer, contains tion. The ESG data hub must not contradict the
the infrastructure for data storage and amalga- holistic approach, since it is the product of data
mation. This database is connected to the various aggregation, consolidation, and contextualization, 02
data sources and aggregates data (from Layer and remains the subset of an organization’s holis-
1) into a single, centralized, consistent data store tic data management approach.
03
to support data analytics, data mining, artificial
intelligence applications, machine learning, and
several other capabilities. This is a crucial part of 04
IT architecture for subsequent powerful analytics
(in Layer 3) with vast amounts of planned, actual,
05
and historical data, important to the ESG domain
due to data-driven decision-making. An organi-
zation-wide central ESG data hub that ensures 06
05
the completeness and consistency of ESG control
and monitoring while guaranteeing transparency
07
and governance of all relevant metrics is essential
and a core element of ESG IT architecture. Archi-
tects must avoid data redundancy and utilize
and enhance existing data models for a lean,
optimum and efficient database. Eventually, this
ESG data hub will serve as the “one source of
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03 | A Holistic Approach
Layer 3 Data Analysis facilitates the execution
of computational logic and data modifications
based on the defined data model. The analytics
engine and the predictive analytics functions
are located on this layer. The structures and
functions of the data analysis level already exist
in almost every organization. They must now be
expanded to include the ESG component and
ESG information. In traditional systems this level
includes, among others, tax applications, plan
applications, and group consolidation. Deferred
taxes, mid-term planning, budget planning, etc.
are analyzed here. In an ESG IT architecture it is
supplemented by ESG components like ESG met-
rics calculation using the steering dimensions and
objectives and other ESG information.
Layer 4 Monitoring and Steering offers the
structure for converging of all information and
displaying it in user interfaces to manage, steer
and communicate the ESG strategy. Organiza-
tions must extend existing systems with ESG
components and integrate them without building
interfaces from the ground up. ESG is not a sep-
arate steering area and should be integrated into
the existing steering systems and decision-mak-
ing processes.
Figure 9 illustrates an ESG reference IT Archi-
tecture which enables the capabilities displayed
in the business capability map (figure 1). For
better comprehension and coherence of the
different layers, examples have been included to
illustrate which source and target systems could
be involved in developing a organization specific
target ESG IT architecture.
The methods and aspects described above
01
illustrate a holistic approach by considering ESG
components from the outset when designing an
IT architecture, decisively advancing ESG through 02
IT at the organization. Scope and complexity pre-
vent comprehensive coverage of all details in this
03
document, but figure 10 shows some crucial suc-
cess factors that underline the need for ESG IT
architecture and what to be aware of to become 04
a leader in an ESG-friendly future.
05
06
05
07
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03 | A Holistic Approach

Fig. 9 – Use case agnostic ESG reference IT Architecture

01
Monitoring & Mandatory Investor Regulatory ESG steering Sustainability Voluntary … Internal External Master Data
Steering sustainability application formats (e.g. and internal ratings and sustainability Financial Financial Management
reporting GRI, WEF, reporting rankings reporting reporting reporting 02
SASB, etc.)

Manage Financial
03
Decarbonization Resilience and Risk Circularity …
Management
Data Security
Reporting Reporting Analytics Planning Planning Planning Advanced Predic- Data and Privacy

Information Management and Governance

Stories Applications Stories Applications Analytics tions Mining

04
Live Acquired Acquired
Data Models Data Models Data Models
IT Architecture Layer

Metadata
Data Analysis ESG Application Tax Application Planning Applications Group Consolidation Management 05
ESG ESG ESG KPI Deferred Taxes & Mid-term Legal Management
Budget Forecast
Metrics Dimensions Calculation Tax Notes Planning Consolidation Consolidation
06
05
Data Consolidation & Data integration Application Data
Aggregation Layer Governance
07
Corporate
Data Harmonization, enrichment & Staging
Enterprise Enterprise Enterprise Layer
ESG Data Hub
Data Hub Data Lake Data Warehouse

Rules & Proces

Data Generation & Other Sources ESG Specific Systems Business Transactional Systems Management
ESG internal
Collection Market Data Utility IoT Health & Emission … ERP HR Finance Fleet
and News Provider Systems sources Safety Sys. Mngmnt.
EAM Production PLM SCM
Satellite and Impact or ESG external Emission Ratings &
… …
Geospatial Risk Data sources Databanks Benchmarks CRM IT Gov. …
Travel

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03 | A Holistic Approach

Fig. 10 – Success factors for ESG IT Architecture

01
ESG IT Architecture best practices Key characteristics of ESG IT architecture

Planning Simplicity
Clarification of business requirements in advance, but Simplification of persistent data models for a lean and
02
technical concept considered directly from the start virtual modeling approach

Integration
Integration into existing reporting and management
Agility
Enabling agile projects that promise early business value
03
approaches and processes, no creation of parallel and evolve incrementally
ESG world
Openness 04
Data Management Opening Business Warehouse resource for tools, methods
Straightforward rule processes for data availability and target groups that are not typical BW applications
and assurance of relevant data quality
Consistency 05
Enablement Ensuring coherent information and adherence to a “single
Knowledge transfer and employee enablement point of truth” strategy

Anchoring Scalability 06
05
Anchoring ESG in existing and future business
processes as foundation for strategic decisions
Success factors for Creating scalable applications that allow for growth in
scale, usage, and functionality

Change Management
ESG IT Architecture 07
Transparent as well as regular communication and
change management to ensure acceptance

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04

The Way Forward

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04 | The Way Forward
Organizations must reconsider whether their ESG
goals and strategy have translated into operational
steps, and how to transform their business to fit
into an ESG-friendly world. The IT requirements for
achieving strategic objectives, as mentioned, must
be defined holistically. They must be reflected
in the overall IT architecture, the key enabler for
achieving an organization’s ESG targets.
Even though IT enables ESG strategy, strategic
ESG targets are the starting point for all actions.
Due to highly volatile business environments, ESG
business requirements tend to change continu-
ously, so the development process of the refer-
ence IT architecture should be agile. After develop-
ment of a reference IT architecture, the next step
in the transform and embed phase is to close any
identified IT capability gaps by selecting not yet
implemented but relevant applications, services,
and platforms for a target ESG IT architecture.
These technologies can be used for ESG intelli-
gence gathering and to execute operational level
ESG business processes. Detailed process and
data models, up to the level of technical fields of
01
the concerned technologies, must be developed,
implemented, and enabled via organizational
change process. 02
Deloitte supports its clients end-to-end to realize
a successful transformation towardsESG-friendly 03
business without compromising on profitability.
Deloitte employs a customer-oriented and struc-
tured approach and helps clients leverage ESG IT 04
architecture. In a stepwise approach, from defining
the target business state to recommending tech- 05
nology and action plans, Deloitte accompanies
organizations in their transformation to becoming
more ESG-friendly. 06
05
This article is the 1st in the Deloitte PoV series
07
“Sustainability & Technology”. Deloitte will
continue to promote ESG in the future and help
its clients tackle challenges in ESG tech, ESG tool
selection, and other use cases across the value
chain – as a pioneering partner for an ESG-friendly
future, making an impact that matters.
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Glossary
01

02

03

04

05

06
05

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05 | Glossary

ESG: Environment, Social & Governance

01
Business capability map: Depicts the complexity of an organization to clearly see what business activities are needed to reach its
objectives. It provides a basis to structure responsibilities and identify focus areas for action within an organization.11
02
Data Model: An abstract model that organizes data elements and standardizes how the elements relate to one another and to the
properties of real-world entities.12
03
Information Model: Provides formalism to the description of a problem domain without constraining how that description is
mapped to an actual implementation in software. It is a representation of concepts, relationships, constraints, rules, and operations
to specify data semantics. It provides sharable, stable, and organized structure of information requirements for the domain con- 04
text.13

IT Architecture: A formal description of an organization's IT application, data and technical infrastructure, providing information 05
about the structure of components and their interrelationships.14
ESG IT Architecture: An organization-wide, cross-business and therefore holistic IT architecture driven by an organization's ESG
06
05
strategy.

Reference IT Architecture: Provides a structure and categories of technology necessary for the enablement of functionalities to
reach specific objectives, it therefore facilitates the definition of a specific target IT architecture.15
07

Target IT Architecture: An organization's specific realization of the reference IT architecture through best-fit technologies. It
demonstrates the post-transformation IT architecture of an organization, including application integration and data models, down
to the last detail.

30
06 | References

01. United Nations Secretary-General’s Independent Expert Advisory Group on a Data Revolution for Sustainable Development (IEAG),
01
A world that counts – mobilizing the data revolution for sustainable development, November 2014, p. 2.
02. Deloitte, Deloitte 2022 CxO Sustainability Report, The disconnect between ambition and impact, January 2022, p. 11 et seq.
03. Deloitte, Financing a sustainable transition CFOs in Europe open up on sustainable finance, 2020, p. 1 et seq. 02
04. Christine Robinson, Inna Vodovoz, Kristen Sullivan, and Jennifer Burns, Deloitte & Touche LLP, “#DeloitteESGnow — Sustainability
Disclosure Goes Mainstream,” Heads Up 26, no. 21 (2019): p. 1 et seq.
03
05. Deloitte, “The CIO’s call to action: Driving an environmentally sustainable tech agenda to accelerate organizational change,” press release,
May 18, 2022.
06. Deloitte, Globally consistent ESG reporting, March 2022, p. 1. 04
07. Gina Miani, Meadow Hackett Rutenbar, Christine Robinson, and Kristen Sullivan, Deloitte & Touche LLP, “#DeloitteESGnow — Setting the
Standard: When ESG and Climate Reporting Meet Financial Reporting,” Heads Up 28, no. 16 (2021): p. 1 et seq.
05
08. Deloitte, ESG executive survey, Preparing for high-quality disclosures, March 2022, p. 8 et seq.
09. Deloitte, The CFO as the Driver of Sustainability, January 2021, p. 7.
10. Data Governance Institute, “Definitions of Data Governance,” accessed March 30, 2023. 06
05
11. Cf. Gerrit Versteeg and Harry Bouwman, Business architecture: A new paradigm to relate business strategy to ICT, Information Systems
Frontiers, 2004, p. 92.
12. Cf. World Wide Web Consortium, “XQuery and XPath Data Model 3.1," accessed March 30, 2023.
07
13. Cf. Yung-Tsun T. Lee, Information modeling from design to implementation, National Institute of Standards and Technology, 1999, p. 2.
14. Cf. The Open Group, “The TOGAF® Standard, Version 9.2, “accessed March 30, 2023.
15. Cf. Pekka Pääkkönen and Daniel Pakkala, “Reference Architecture and Classification of Technologies, Products and Services for Big Data
Systems,” VTT Technical Research Centre of Finland, 2015, p. 1 et seq.

31
07 | Contacts

01

02

03
Marcus Goetz Sascha Mauries Dorothea Haas
Partner Director Senior Manager
Tel: +49 89 29036 7123 Tel: +49 211 8772 4637 Tel: +49 151 58077234 04
mgoetz@deloitte.de smauries@deloitte.de dhaas@deloitte.de

05

06
05

07

Asad Ali Wiebke Schütt Jacob Binder

Senior Consultant Senior Consultant Junior Staff
Tel: + 49 211 8772 7890 Tel: + 49 511 3023 1071 jabinder@deloitte.de
asaali@deloitte.de wschuett@deloitte.de

32
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Issue 06/2023