Data-driven sustainability - a growing competitive advantage

Sustainability has moved from reporting to moving into the business. We know that. But has it also moved into your data infrastructure? For many medium-sized and large organizations, this is precisely where both the bottleneck and the opportunities lie.

When we meet organizations, we see the same pattern time and time again: the Sustainability Department and IT department live in parallel silos, without a clear shared vision or meeting forum. It costs more than most people realize.

Access to data and system integrations to business systems exists, but sustainability reports are still handled parallel Excel-workflows, without traceability or connection to the existing data.

Knowit has worked for decades with connecting Data Infrastructure to meet new Business Needs. In this Reference Case, we mapped synergies between existing systems and the information requirements of Sustainability Reporting, integrated relevant data sources and established a transparent calculation and reporting structure in the existing environment – ​​adapted to meet audit requirements.

The result was a Sustainability Reporting that not only meets the requirements for CSRD audit but also creates a solid foundation for ongoing monitoring and management of sustainability work.

We see that this is something that many struggle to achieve today and where we can support – here we share four lessons learned:

Scope 3 is a data problem

For a medium-sized or large organization, Scope 3 emissions are often 70–90 percent of the total climate footprint. And Scope 3 is, by its nature, a data challenge: collection from sometimes thousands of suppliers, matching against emission factors, traceability back in the chain and the need to defend calculations to auditors or customers. According to the TCFD, over 80 percent of companies state that it is difficult to measure their Scope 3 emissions. The most common reasons: challenges in collecting relevant data and inadequate processes.

In the near future, AI will play an increasingly important role in automating data collection, identifying quality deviations and accelerating Scope 3 calculations along complex value chains – this will be made easier if the organization already has a well-managed data infrastructure and data governance as a foundation, and if sustainability and IT collaborate on both the requirements and implementation.

Same requirements, different silos

Good "Data governance" means clear data catalog, defined ownership, well-established information security, traceability, quality-assured data flows and audit trails. Legal requirements that CSRD requires of sustainability reporting are: traceable and verifiable data, transparency about calculation methods and the possibility of third-party review. These are in practice the same requirements – set against two functions that rarely collaborate efficiently.

The same applies to SBTi (documented methodology along the entire value chain), CDP (detailed questions about data quality and verification processes) and EcoVadis (the systematics behind the work, not just the intentions). Common to all: they are based on a functioning data infrastructure – not manual Excel processes that are run once a year.

The overlooked synergy

In recent years, many organizations have invested in modern data warehouses, Data Governance and integration with ERP and supply chain systems. The company's Sustainability Department then builds its Scope 3 process in Excel, with manual data collection via email to suppliers – without using the infrastructure that already exists.

Financial data, transaction data, logistics data, energy data – everything that the Sustainability Department is looking for is often already in the organization. Just not linked to the organization's sustainability calculations.

A growing competitive advantage

We are now seeing that customers' demand for sustainability data from their suppliers is increasing rapidly. Industrial companies with SBTi commitments require primary data from their suppliers. Public procurement takes sustainability data into account. CDP's supply program means that thousands of suppliers must answer detailed questions about their emissions every year.

Organizations with well-structured and traceable sustainability data can respond credibly and quickly. Those without the infrastructure spend weeks compiling an answer – and risk losing business because of it. The ability to provide transparent sustainability data is on the way to becoming a hygiene criterion.

Why Knowit?

It is at the intersection of sustainability strategy and data infrastructure that we work at Knowit. We are one of the few consulting companies that combine strategic expertise in business strategy, ESG and CSRD with deep technical capabilities in IT strategy, Data Architecture and Data Engineering.

We can take a holistic approach – from defining what to measure and why, to building the technical infrastructure that makes it possible to actually measure it, continuously and traceably. We create consensus and collaboration between the functions that need to work together.

Read more about our ESG & Digital Sustainability Service