In this guest blog post, Bjoern Stengel, IDC’s global sustainability and research lead, highlights the rising importance of ESG factors for the enterprise value of the organization and discusses how the digitization of workflows can help businesses address issues across different ESG pillars.
Guest IDC Blogger: Bjoern Stengel
Date: August 30, 2022
Sponsored By: SAP
Environmental, social, and governance (ESG) issues are now critical business drivers for organizations around the world. According to a 2021 IDC survey, 74% of sustainability decision makers consider ESG factors to be “very important” for the enterprise value of their organization (compared to 48% in 2020). Operating more sustainably is no longer seen as a cost factor or simple reputational risk management practice but as a way to achieve greater operational efficiency, financial performance, and competitiveness. “Doing well by doing good” has become a common view on corporate sustainability, and most organizations are actively implementing it into their day-to-day activities.
Corporate sustainability approaches are becoming increasingly integrated into businesses’ operations. In addition to reporting ESG data to investors and maintaining regulatory compliance, companies are looking to improve their operational performance through more sustainable business practices. According to IDC survey data, improving operational efficiency and cost are considered the top factors driving corporate sustainability initiatives globally. Operational improvements typically include a variety of ESG issue areas and internal stakeholders across different functions.
While there has been much focus on environmental issues, particularly decarbonization in the context of climate change, human and social capital topics are gaining in importance. To successfully implement ESG into their operations, organizations need to take a comprehensive approach that considers all material ESG issues. Technology plays a critical role in a company’s ability to execute on its ESG strategy, and IDC considers technology an important enabler for sustainable transformation. In many ways, sustainable transformation and digital transformation go hand in hand and can no longer be treated as isolated phenomena.
The digitization of workflows, e.g., using electronic documents and eSignatures, is important in the context of transformation, and it can help businesses address issues across different ESG pillars. The reduction of physical documents has an immediate effect on an organization’s environmental impact. In addition to saving trees, using less paper contributes to the reduction of energy required to produce and ship the paper as well as the energy used in printing and other associated activities. Digitization also cuts down on wastepaper that would end up in landfills. Cost reductions and increased productivity are important pieces of ESG-related value creation. According to a
McKinsey study, an effectively executed ESG strategy can help avoid rising operating expenses, which in turn can significantly affect operating profits. The use of electronic documents can help to improve an organization’s general operational efficiency. Employees can save time and resources processing, sending, and organizing documents, which shows that digitization has both financial and non-financial (ESG) benefits.
Electronic documents and eSignatures also enable increased security features, which help companies address social capital concerns such as customer privacy and data security. For many industries, those areas constitute material ESG issues. Breaches or information leaks have significant reputational consequences and can lead to downgrades of a company’s ESG rating scores. Digitizing these formerly manual tasks helps organizations with their ambitions of creating a triple bottom line that aims at generating financial returns while also benefiting the planet and people.
The use of electronic documents and eSignatures is an important element of digital transformation efforts for an organization and can lead to improvements on its financial metrics. The related sustainability benefits also help companies improve on their non-financial or ESG metrics across all three pillars of ESG.
To learn more about how eSignature and sustainability visit
SAP Signature Management by DocuSign at SAP.com
About Bjoern Stengel
Bjoern Stengel is IDC’s global sustainability research lead. His research focuses on how environmental, social, and governance (ESG) topics impact and shape business strategies and technology usage. He provides insights into market opportunities, adoption strategies, and use cases for sustainability-related technologies and services. Bjoern helps IDC’s clients understand the impact of technology-enabled, sustainable transformation processes in the context of sustainable business strategies, operations, and products and services through research reports, news publications, and speaking engagements at industry events such as Climate Week NYC.
Bjoern is also supporting IDC's Worldwide Business Consulting and Environmental, Social, and Governance (ESG) Business Services research.
