ESG Practices and Emerging Technologies as

enablers in Sustainable Transitions

Mumbai, Maharashtra
saketisofficial05@[Link]
Saket Kulkarni
Department of Computer
Engineering
MPSTME,NMIMS Management
Abstract— This alarming reality of climate change that the first publicly available mutual fund in the US that
the world is confronting today is stemming from considered social and environmental factors in
unsustainable patterns of resource consumption and investment decisions which laid the ground work for
environmental degradation, which has emphasized the the future of Sustainable investing and ESG investing.
urgent imperative for corporations to undergo In 1992, the United Nations program (UNEP) published
transformative sustainable transitions, aligning their the statement of commitment by Financial Institutions
operations with the principles of environmental on Sustainable Development.
stewardship, social responsibility, and long-term value
creation. ESG has emerged as a critical criterion for It was an open acknowledgement by the financial
evaluating ethical practices and sustainability actions that institutions of their role in creating and growing a
impact a company’s day-to-day operations whereas sustainable economy and lifestyle. In the year 2001,
emerging technologies have stemmed as potent enablers in Dec 2. , Enron had filed for its bankruptcy protection,
this pivotal shift, offering a diverse array of solutions to due to the wave of scandals that started to appear in the
drive sustainability across various sectors. The purpose of late 2000’s this soon prompted the demand for better
this study is to delve into the multifaceted role of ESG business practices. So in 2004, former UN Secretary-
practices and emerging technologies in catalyzing
General Kofi Annan wrote to 50 CEOs, urging them
corporate sustainability transitions.
to join an initiative under the UN Global Compact.
Keywords—ESG, Sustainable Investment, A year later, Who Cares Wins Report gets
Environmental Impact, Sustainability Metrics, Corporate released. This established the link between ESG actions
Governance, Risk Management, Supply Chain and financial performance. This was the first time the
Management, Ethical Investing, Emerging Technolgies. term ESG came into being. In that same year, the
I. INTRODUCTION UNEP Finance Initiative highlighted the relevance of
ESG issues in financial valuation in the Freshfields
. Introduce alarming rate of resource depletion Report.
issues and the need for businesses to transition to
optimization and conservation and the relevance of These above two publications led to the launch of
sustainability transitions and SDGs. the Principles for Responsible Investment (PRI) in
the year 2006. This organization was to understand the
Many companies have faced scrutiny due to effect of ESG factors and promote sustainable
unethical practices, leading to bankruptcy or damage to investments that accounted for these issues. At that
their reputations within their respective industries. time, 63 investment companies with $6.5 trillion in
Beyond social and governance issues, the assets under management (AUM) joined in as they
environmental impact of a company's operations has understood the importance of the management of
also become a crucial factor in investment decisions. environmental, social and governance issues which is to
[1]
The Concept of ESG existed long before in the be the integral to the company’s competiveness in a
past. Back in the year 1953, Howard Bowen’s book globalized world.
‘Social Responsibilities of the Businessman’ started In 2011, Jean Rogers founded the Sustainability
the discussion of corporate accountability but it went Accounting Standard Board (SASB) to develop
against the rise of the institutional investors and their accounting rules that could reflect ESG’s impact on a
theory that the company’s most important duty was the company’s bottom line in a specific industry.
satisfaction of it’s shareholders that is to make a lot of
money.
In 1971, the there a two united ministers who
opposed the Vietnam war so they created the Impax
Funds managed by Impax Asset Management
(formerly known as Pax World Funds). It was one of
 Google Trend of ESG

If you look in the above Google Trends chart you Median returns on Sustainable funds compared to
could see that the ESG was fairly popular in early 2005 Traditional funds
but soon it took off in the year 2019. One of the most
To help companies to reach their ESG objectives,
prominent Financial Institution who is backing ESG is
they can make use of the emerging technologies that
Blackrock. It has been involved in ESG investing since
would help them transition from their traditional
2012.
inefficient practices to the advance modern systems.
[2]
According to KeyESG, at present, 2024, Thirty [4]
According to EY (Earnest and Young) report,
percent of the investors have claimed that they have
Seventy-six percent of enterprises believe that emerging
difficulty in locating suitable and appealing ESG
technologies can play a critical role in reducing their
investing possibilities, despite the market’s explosive
organization’s carbon emissions. ESG is most likely to
growth for ESG investment products. Another
feature as a leading consideration in 5G and IoT
estimation has put forward that ESG focused
investment, and companies investing in these areas
institutional investments are projected to reach $33.9
already see a range of benefits.
trillion by 2026. Investment funds with adherence to
ESG principles hold more than $18 trillion in assets.
Companies are increasingly prioritizing and examining
their environmental impact and enhancement of
sustainability. ESG considerations are considered by
89% of the investors when making investment
decisions.
[3]
Few Statistical Graphs that we can look to get a better
understanding of the situation of ESG.

Impact of Emerging Technologies on sustainable

enterprises

In the above graph, Fifty-four percent of the enterprises

we surveyed believe emerging technologies can play a
vital role in accelerating their business’s progress on
sustainability. A further 41% believe these technologies
can play a largely positive role but also present some
risks. This awareness of potential downsides reflects
current research that estimates information and
communication technology (ICT) in its entirety
accounts for 1.8% to 2.8% of greenhouse gas emissions
and an even higher proportion of electricity
Popularity of Sustainable Fund assets across consumption. Asia-based enterprises are the most likely
different countries. to highlight the vital role of emerging technologies
(62%), while European businesses are the most likely to
say their positive impact is accompanied by some risks
(49%). This regional variation may reflect European for all people and eliminate the barriers that have led to
policymakers’ historical focus on the energy unequal treatment. Its main motive is to create a system
consumption risks posed by data centers and cloud which would have series of policies that would address
technologies. the historical and systematic inequalities. Inclusion
In this paper we are going to talk extensively about means creating a friendly environment that would feel
the ESG Practices and how emerging technologies will welcomed, respected, supported and valued for every
act as enablers in Sustainable Transitions. individual. It’s main purpose is to create a place or to
build a culture that would make an individual or a
II. LITERATURE REVIEW group feel that they belong and can fully participate.
ESG is one of the important priorities in today’s The ‘G’ in ESG signifies Governance which is the
modern corporations. In order to achieve this the practices, controls and the procedures that the company
companies are using the tools and the technologies to adopts in order to govern itself and make effective
transition from their traditional practices to modern decisions. The organization is obliged to comply with
systems which will enable them to have proper the law and meet the needs of external stakeholders
governance over their company’s decision making and
operation, improve relationships with their employees According to Mckinsey report, there are five ways
and their stakeholders and to ensure that their backend to create value
operations does not emit any harmful effluents into the
atmosphere. Emerging technologies are one of the ways
that corporations are enabling themselves to transfer
their outdated practices to modern systems. Emerging
technologies like Internet of Things (IOT), Blockchain
Technologies (BCT), Artificial Intelligence (AI),
Augmented Reality (AR) and Virtual Reality(VR), Web
development, Cloud Computing, Big Data and 3D
printing.
ESG as an Enabler
Implementing ESG practices in the corporations can
be a step further for them to transition from
conventional practices to a more sustainable and
responsible business models that prioritizes
environmental oversight, social equity and ethical
governance.
ESG has three parts: Environmental, Social and
Governance.
[5]
The ‘E’ in ESG, environmental criteria include
Table that summarizes five ways for value creations
the energy of the company that takes in and the waste it
discharges, the resource it needs and the consequences 1. Top-line Growth: A company that proposes a strong
for living being as a result. This criterion also takes in Esg proposition helps to enter new markets and
the consideration of carbon emission and the polluting gain regulatory approval. Companies that have
effluents the company’s backend operation releases. superior ESG performance can drive up the
The ‘S’ in ESG, Social criteria signifies the company’s valuation and consumer preference with
relationships that the company has with its employees some consumers willing to pay more for the
and the stakeholders. The reputation it fosters with the sustainable products. Example might include
people and institutions in the communities where the Unilevers’s water saving products and Neste’s shift
company does business with. This criterion also to renewable fuels.
includes the concept of DEI i.e. Diversity, Equity and 2. Cost reductions: Company that implements ESG
Inclusion. Diversity means the differences in social practices effectively can improve resource
groups working together as a team towards a common efficiency and reducing waste which leads to
goal. Diversity includes race, ethnicity, Gender, Age, reduce cost. There are companies like 3M and
Disability, Socioeconomic status, Education and FedEx which has saved billions through
Background. Diversity in teams can lead to various environmental initiatives and operational
insights towards a specific problem. Equity means improvements which demonstrates the financial
providing equal opportunities for all people in the benefits of sustainability.
organization. This ensures fair treatment, advancement 3. Regulatory and Legal Interventions: Companies
with solid ESG practices are positioned better than
 those who are not. This is to avoid government implement artificial intelligence algorithms. AI is often
intervention and public scrutiny, which can lead to described as incorporating practical tools and methods
60% of profits In certain industries. Strong ESG which suitable for solving various kinds of real world
Practices can help the companies to reduce the risk problems like correlation, optimization, classification
of regulatory actions and helps in increasing and prediction problems. Due to the successes in deep
strategic freedom. learning world, AI has been pushed to the frontiers of
4. Productivity uplift: Studies have given the results the research and development in practically every area.
which explains that robust ESG proposition can
Blockchain is another technology that can help
improve employee motivation, retention and
corporations to reach their ESG Goals. Blockchain is a
productivity by providing a sense of purpose.
distributed ledger that helps the participants on this
Strong ESG practices generate higher shareholder
platform to do transactions in pseudo-anonymous form.
returns and have more satisfied employees.
5. Investment and asset optimization: Implementing This technology emerged after the infamous event that
ESG can improve investment returns by focusing happened in 2008. Subprime mortgage crisis of 2008
on sustainable opportunities and avoiding stranded made the public lost belief in the financial institutions.
assets. It addresses environmental challenges Soon after this period, an anonymous man i.e. Satoshi
which can prevent financial losses and create new Nakamoto published the paper which soon excited the
investment opportunities, especially in industries developers to deploy this Blockchain system. This
like energy and urban development. System eliminates the middle man and the transactions
are partially hidden. Since its inceptions, Blockchain
A comprehensive search of the available literature technology has not stopped itself till finance field, it is
in the field was carried out inorder to undertake a also entering in Supply chain management, in health
systematic literature review. The publication data care, etc.; This is a promising technology that can make
was exported to MS Excel 2021 and used for big changes in the corporative world. [6] Blockchain
further analysis. Patterns of the maps helped us to participants are considering environmental, social and
recognize, analyse and identify specific topics governance (ESG) issues in their efforts to innovate.
suggested within the ESG and emerging For example, Ethereum, a Blockchain platform and the
technology research and their relationship with the second largest cryptocurrency by market capitalization,
firms undergoing sustainability transitions, Ether (Eth) is transitioning its consensus mechanism
qualitatively. from proof-of-work to proof-of-stake in an effort
known as “The Merge”. One of the main drivers behind
ESG AND Sustainability transitions: Density The Merge is the ability to measure reduce energy
Visualization Map consumption, indicating the urgency with which
developers are factoring in their environmental impact.
[7]
IOT or Internet of Things, refers to the collective
network of connected devices and the technology that
ESG AND Sustainability transitions: Network facilitates communication between devices and the
Overlay Visualization Map cloud, as well as between the devices themselves. IOT
is used in a lot of real life applications such as
Connected Cars (cars connected to internet), smart
cities, smart buildings, etc. [8] The Internet of Things has
Emerging Technology as an Enabler the ability to impact Environmental, Social and
Governance (ESG) outcomes. By automating and
Artificial Intelligence has surely revolutionized our optimizing processes and systems, IOT can help to
world. Nowadays we can AI being implemented in improve energy efficiency, conserve resources and
every field. From speech recognition from our mobile reduce pollution. It can also have a big impact in terms
phones to the Self-driving cars. AI is also being of social workplace such as changing the nature of
implemented in corporations to achieve its ESG work and raising concerns about data privacy. To be
objectives. [5] As the quantity of available data keeps make it a point that the governance of IOT raises
growing exponentially, it becomes more challenging for important ethical and regulatory considerations.
investors, companies, and state agencies to make
[9]
balanced decisions in addressing ESG issues. Beck in Augmented Reality (AR) and Virtual Reality
1980’s the stakeholders used to rely on public available (VR) are both technological experiences that change
scarce data to make their decisions but in this current how digital technology interacts with the physical
generation, the information is available everywhere. It world. AR and VR are often clubbed together, but each
becomes quite labor-intensive to process all the has its way of interacting with the virtual environment.
[10]
information in a tight frame. One of the best ways to VR and AR technologies offer innovative ways to
accelerate data preprocessing and enhance the engage stakeholders and communicate ESG initiatives.
understanding of the extracted information is to Virtual simulations can immerse users in realistic
environments, fostering empathy and understanding of [16]
Big data analytics boosts ESG goals and the
complex sustainability challenges. AR applications can performance through a structured process which starts
provide interactive experiences, allowing consumers to with the collection of data from various sources and
scan products and access information on their internal operations covering environmental, social and
environmental and social impact. governance metrics. This data is then integrated into a
[11]
Web development plays a key role in advancing the centralized platform where it is cleansed and is
ESG goals by using the sustainable practices in these standardized. This data is then analyzed using various
technologies. Web developers typically reduce carbon advanced analytics techniques which show trends,
emissions by optimizing the site performance, insights and patterns which may be used to forecast the
minimizing the data transfer and choose energy- outcomes and enhance operations. The finding
efficient hosting solutions like the GreenGeeks [12], represented via dashboard and reports provides insights
SiteGround [13] and many others. By following and into ESG performance and therefore, helps in informed
using green coding practices such as optimizing the decision-making process resulting in the use of
images, reducing the use of JavaScript and by using sustainable process and increase in transparency for the
modern energy-saving design principles, developers stakeholders and governance. This holistic approach
can reduce environmental impact on their projects. ensures the ongoing monitoring and adoption, helping
Furthermore, the developers can utilize carbon the businesses to work upon their ESG performance
awareness tools like Webpage Test’s Carbon Control thus optimizing the resource allocation and retain the
feature [14] and the Website Carbon Calculator to assess competitive advantage. Additionally, the ability to
and reduce their website’s carbon footprint. By
predict and solve potential ESG issues such as supply
integrating these practices and tools, web professionals
chain disruptions, environment liabilities or reputational
can promote a more ecofriendly digital landscape while
also fostering a more inclusive and transparent web damage thus helping in risk management thus
environment. supporting long term sustainability.
[15]
Cloud Computing significantly helps in advancing A comprehensive search of the available literature in
the ESG goals by enhancing sustainability, inclusivity the field was carried out inorder to undertake a
and efficiency through various technological systematic literature review. The publication data was
innovations to reduce the carbon footprint, improve exported to MS Excel 2021 and used for further
transparency and increase the efficiency in managing analysis. Patterns of the maps helped us to recognize,
the data. Many firms can benefit from the cloud analyse and identify specific topics suggested within
services by switching from the traditional on-premise the ESG and emerging technology research and their
data centers to cloud providers that have support for relationship with the firms undergoing sustainability
renewable, clean and creative coding approaches. Cloud transitions, qualitatively.
providers adhere to many international and regional
compliance standards and therefore helps many Sustainability transitions AND emerging technologies:
businesses in meeting their regulation obligations Network Visualization Maps.
efficiently making it a vital part of the ESG framework.
It facilitates remote work which has many benefits like
promoting work-life balance, hiring of diverse global
talent thus fostering inclusivity, diversity and equality
at the workplace. By providing scalable and affordable
solutions, cloud computing simplifies the access to
advanced technology, enabling even small and medium
scale enterprises to adopt sustainable business practices.
Tools provided by cloud computing services help in
monitoring emissions, track diversity and ensure data
security which helps in the predictive analytics for
sustainable plaining. By also contributing to circular
economy initiatives cloud computing helps by reducing Sustainability transitions: emerging technologies:
electronic waste and optimizes the resource usage. By Network Overlay Visualization Map
aligning cloud strategies with ESG goals, businesses
can preserve a competitive edge while making a Sustainability transitions: emerging technologies:
significant progress towards sustainability by using Density Visualization Map
cloud-based solutions.
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