By Juan Miguel Pérez Rosas, CEO, Finboot
Change is inevitable, what better proof of that than the impact the COVID-19 pandemic has had in every aspect of our lives. Among the many changes that the pandemic brought about, one undeniable shift is how it has firmly placed digital transformation at the top of the business agenda, demonstrating that, in today’s world, it is an operational necessity, not just a “nice to have”.
Over the past few years, numerous companies have come up against internal and external resistance to digital transformation, as some stakeholders have been reluctant to see innovative digital processes replace more familiar and conventional methods. But those days are certainly over; today the need for digital is more evident than ever. It is now clear that accelerating the digital journey will help world class companies secure a competitive edge in an increasingly competitive landscape.
Digital transformation might not be the solution to all evils, but it could be a way for organisations to better face the challenges ahead, safeguard themselves against unforeseen circumstances, and to reinvent themselves in a new reality. It can, and has, helped companies open new business opportunities and ways to engage with their customers; and it also has delivered tools to our day to day that hugely optimize margins and bring forth significant operational efficiencies.
At the same time, over the past few years, Environmental, Social and Governance (ESG) has become a key business imperative and it’s clear that it’s here to stay. This is yet another area where digital transformation has grown to play a key role. Emerging digital technologies are not only accelerating companies to meet their ESG agenda, but actively enabling them to do so.
Corporates view ESG in a number of different ways: some see it as a legitimate business strategy, others as a self-regulatory initiative, and then there are those who believe it to be the latest marketing spin. Whatever the motivations, it is evident that positive ESG outcomes at a business level will have a hugely beneficial impact on our society. Central to this is ensuring companies can measure progress efficiently, accurately and securely, as this will help them prove that they have achieved what they set out to do, while holding them accountable for meeting their sustainability goals. It all comes down to building trust with customers, investors and regulators.
When communicating ESG achievements, companies need quantitative metrics that verify their progress and authenticate what they are saying. Against a backdrop where corporate ESG activity is increasingly scrutinised by both regulators and ever-more socially and environmentally conscious consumers, simply setting goals isn’t enough. They need to gather and harness the power of data across the value chain; only this will guarantee market access, build trust and provide them with a license to operate.
However, building trusted and transparent business processes that are aligned with ESG policies is easier said than done, as they often involve complicated supply chains spanning different geographies. In the face of this significant challenge, embracing digital is crucial if businesses are to prove they’ve delivered on their initiatives. Blockchain is one solution to this conundrum, owing to its digital and immutable nature.
Digital solutions can bring traceability, transparency and compliance to value chains; with operational efficiencies and cost savings by automating and streamlining processes. Examples of this are the way Stahl, a specialty chemicals producer, uses a digital solution powered by blockchain technology to share verified sustainability credentials with consumer brands that use its products; or how Minexx, a technology company in the mining industry, is securing the mineral supply chain from earth to tech companies and governments.
Transparency and trust are the founding principles of ESG. By using digital technologies, businesses can dramatically improve their sustainability credentials and reporting procedures. There are countless other areas where traceability could help to measure the environmental and social impact of value chains as, ultimately, any asset that can be measured and traced can provide evidence of achieving ESG objectives.
Digital and sustainability are becoming ever more interlinked and, as ESG requirements mature, many more digital sustainability applications will inevitably emerge and continue to change the corporate landscape.
Finboot is a technology company that gives its world class customers a competitive edge through accelerating their digital transformation, realising value and building trust through blockchain.