Dec 19, 2022

Enhancing ESG performance with IoT

Julie Sylvest

Investors use ESG (environmental, social, and governance factors) to screen potential investments based on a company’s non-financial performance. IoT can make the collection and reporting of this data more accurate.

Earth’s temperature has been rising each decade since 1880. However, since 1981, the rate of warming has doubled. In the decades to come, the amount of Carbon Dioxide (CO2) and other greenhouse gasses we emit will influence the future rate of warming. To protect the environment, the adoption of a treaty in 2015 had the aim of strengthening the mitigation and adaptation to climate change. Many countries and companies are establishing carbon neutrality plans with the Paris Agreement. This treaty is one example of the many global initiatives to safeguard the environment against future changes in global heating.

Along the same lines as this and other global initiatives, ESG is a framework developed by the United Nations that helps understand how an organization manages environmental, social, and governance criteria (ESG factors).

Improving ESG in an organization

Investors use ESG to screen potential investments based on a company’s non-financial performance. An organization may want to perform an ESG analysis to show investors they are worth their time and money. According to PwC’s global survey on ESG, “76% state that they would discontinue their relationship with companies that treated the environment, employees, or the community in which they operate poorly”. ESG incentivizes businesses to adopt practices that better the environment, consider the health and safety of employees, and encourage transparency and innovation.

So how can an organization improve operations and ESG performance?

By looking at data, it is easier to manage risks with ESG. Utilizing data automation technology will save time and effort when implementing a system to improve ESG. For example, switching to innovative building technology, such as automating climate control, helps to improve efficiency and sustainability. However, an organization’s reputation not only lies in the sustainability of the building but also in employee satisfaction. These smart building technologies to maintain energy consumption can improve working conditions by ensuring employees are comfortable and safe.

ESG and IoT applications

IoT can make the collection and reporting of data more accurate to improve a company’s energy efficiency, health, and security. Sensors collect data and transmit them to an IoT platform via LoRaWAN, cellular, or other IoT protocols. The IoT platform monitors levels continuously and displays the data on a dedicated dashboard. The visualization and analysis of data allow for proper decision-making. Depending on the use case, the analyzed data can support decisions influencing different ESG factors.

  • How smart technology supports governance factors

While IoT has the least to offer in supporting governance factors, it can still add value in data transparency, accuracy, and sending all data to one central cloud source.

On the other hand, IoT applications have a strong influence in supporting environmental and social factors.

  • How smart technology supports environmental factors

IoT can help a company visualize data to understand its impact on the planet. Energy use monitoring and optimization can help hit carbon-neutral targets. Using sensors to monitor real-time energy consumption allows for better data reporting and visualization. This visualization enables trend analysis, the study of consumption patterns, and, eventually, the identification of optimization opportunities. Many IoT applications support this. People counting uses dedicated sensors to track office space usage, reducing energy consumption and electricity when space is unoccupied. Optimizations of this case can include automatic functions to turn lighting and air vents off when no one is present. Air monitoring sensors directly measure temperature and humidity to prevent unnecessary heating and ventilation when building temperature reaches a certain threshold. Further optimization can include the trigger of a window to open to allow for cooling to the optimal temperature. By installing temperature, motion, or lighting sensors, management can better understand how employees use the office space to increase optimization.

  • How smart technology supports social factors

The social factors of ESG include aspects surrounding employees and company reputation. COVID has significantly accelerated the focus on employee health, well-being, safety, and security. IoT supports many smart building use cases that focus on these topics.

Occupancy monitoring sensors track how many are in the office at a given time. Visualizing this data allows for flexible work practices, such as utilizing shared desk systems, and facilitates social distancing to avoid overcrowding. Employees have access to this data to make informed decisions surrounding hybrid work. Similarly, people flow data enables the implementation of cleaning scheduling models for smart washroom monitoring. Cleaning frequency can be better managed when real-time usage is taken into consideration.

Air quality levels also influence employee safety. High levels of CO2 in the air link to poor decision-making, lack of focus, and drowsiness. Air quality monitoring sensors measure the level of CO2 and volatile organic compounds (VOC) and display the data on a dashboard to adjust the environment accordingly.

Utilizing smart technology also allows quick feedback on maintenance issues that need to be addressed timely, known as preventative maintenance. Automating this process improves employee safety. Integrating notification services such as email, SMS, Microsoft Teams, or Slack can inform specific recipients or the entire team of the IoT infrastructure behavior.

IoT data collection and analytics with akenza

Just as global initiative forums such as the Paris Agreement support the effects of climate change, the akenza platform can support ESG strategies. The akenza platform manages connectivity, devices, and data in one place to help organizations scale their own smart solutions. Our platform offers multiple output connectors and integrations, allowing data processing in 3rd party applications. This provides real-time results and data visualization for a wide variety of smart solutions.

akenza has established long-term relationships with major clients such as Zurich Insurance, ISS Switzerland, George Fischer, and various SMEs.

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