Page 45 - CMA Journal (Nov-Dec 2024)

F oc us S ec t ion

Role of Digital Tools in Enhancing Sustainability can trace raw materials and monitor supply chains to • Millat Tractors utilizes real-time data platforms to
Reporting ensure sustainable practices are followed. Although monitor energy consumption, achieving a 10%
blockchain adoption in Pakistan remains limited, its
Digital tools are revolutionizing the way businesses collect, potential to enhance supply chain transparency and reduction in energy use per unit of production in 2023.
analyze, and disclose ESG data. These technologies not strengthen responsible business practices is • Unilever Pakistan has implemented platforms like
only improve the accuracy of reporting but also reduce the signi cant. PwC’s report reveals that 53% of Measurabl to streamline sustainability reporting,
time required to generate reports, ensuring compliance businesses are exploring blockchain to improve leading to a 15% reduction in packaging waste in
with global standards. Deloitte's 2024 CxO Sustainability transparency in ESG reporting. 2023 while improving energy e ciency.
Report underscores that 43% of businesses view
automation, including technologies like AI, machine 4) Cloud-Based Reporting Platforms: Cloud-based Recommendations for Strengthening
learning, and blockchain, as crucial to driving operational platforms are essential for automating the collection, Sustainability Reporting in Pakistan
e ciency and improving sustainability outcomes. storage, and analysis of ESG data. These platforms To further enhance sustainability reporting in Pakistan,
enable businesses to centralize their ESG data,
Sustainability has evolved from a peripheral issue to a long-term corporate By adopting these digital tools, businesses can not only improve collaboration across departments, and the recommended actions are:
core element of corporate strategy. As global value. Furthermore, 85% reduce their carbon footprints and optimize energy use ensure compliance with local and international • Lack of Skilled Workforce: A shortage of expertise in • Invest in Digital Infrastructure: Expanding access to
environmental concerns intensify and societal of global companies but also enhance operational e ciency, leading to cost sustainability standards. According to PwC, 60% of elds such as AI, blockchain, and IoT hinders the digital infrastructure, particularly for SMEs, will enable
expectations shift, businesses are increasingly turning to increased their invest- savings and improved pro tability while meeting businesses have adopted cloud-based solutions for widespread adoption of these technologies. businesses to make better use of sustainability reporting
digital tools to advance their sustainability agendas and ments in sustainability sustainability goals. For instance, AI and Machine ESG reporting, reducing the need for physical Addressing this skills gap through targeted training tools.
comply with environmental, social, and governance (ESG) in 2024, demonstrating Learning (ML) analyze massive datasets, predict future infrastructure while enhancing operational e ciency. programs is crucial for broader adoption.
standards. This article explores the transformative role of a broader shift toward sustainability challenges, and provide actionable insights Opportunities • Incentivize Green Technologies: Tax incentives for
digital tools in sustainability reporting with a special focus embedding sustainable to guide decision-making. 5) Internet of Things (IoT): The Internet of Things (IoT) businesses adopting green technologies can encourage
on how these tools are advancing ESG practices within practices in business The same report indicates that 55% of global businesses provides real-time data on key sustainability metrics • Attracting International Investment: As global digital tool adoption for sustainability.
Pakistan’s emerging sustainability landscape. strategies to foster have seen tangible improvements in sustainability such as energy consumption, water usage, investors increasingly prioritize sustainability, Pakistani • Foster Public-Private Collaboration: Strengthening
emissions, and waste. IoT devices continuously
Global Perspective on Sustainability Reporting innovation, create value, practices through investments in AI and ML, particularly in monitor these metrics, enabling businesses to companies that adopt digital tools for enhanced ESG cooperation between the government, private sector,
and mitigate risks. reporting will be better positioned to attract foreign
Sustainability reporting has become a fundamental Pakistan’s Emerging resource optimization and carbon reduction. While these optimize resource consumption and reduce their capital. Aligning with international standards can help and technology providers will accelerate digital tool
aspect of corporate transparency across the globe. Sustainability tools are still being introduced in Pakistan, industries such environmental impact. In Pakistan, industries such as these businesses compete globally. adoption.
Companies now face heightened demands from Landscape as energy and manufacturing are beginning to explore agriculture, energy, and manufacturing are • Engage the Financial Sector: The nancial sector can
regulators, investors, and consumers for credible and their potential to enhance ESG practices. beginning to embrace IoT technologies. IoT-enabled • Enhancing Brand Reputation: Transparent ESG drive sustainability by incorporating ESG factors into
accurate data regarding their ESG activities. Regulatory Sustainability reporting in Pakistan is still in its nascent Some of the key digital tools reshaping devices can help optimize irrigation in agriculture, reporting strengthens a company’s brand reputation. investment decisions, encouraging businesses to
frameworks, such as the European Union’s Corporate stages compared to more developed economies. reduce water wastage, and track emissions in By adopting digital tools, businesses can demonstrate implement robust sustainability practices.
Sustainability Reporting Directive (CSRD) and the U.S. However, the Securities and Exchange Commission of sustainability reporting include: manufacturing. PwC's report indicates that 47% of their commitment to responsible environmental and
Securities and Exchange Commission’s (SEC) Pakistan (SECP) has taken signi cant steps toward 1) Data Management Platforms (DMPs): Data businesses are utilizing IoT to monitor and optimize social practices, which in turn fosters consumer loyalty. • Invest in Climate Data: Expanding investments in
climate-related disclosure guidelines, are establishing improving ESG transparency. Through the issuance of Management Platforms (DMPs) centralize ESG data sustainability metrics. climate-related data technologies will improve
rigorous standards for ESG reporting. These frameworks guidelines encouraging publicly listed companies to collection and analysis, enabling businesses to Pakistan’s agriculture sector, which is vital to its economy, • Boosting Operational E ciency: Digital tools not reporting accuracy and help Pakistani businesses meet
require businesses to disclose detailed, standardized ESG report on their ESG performance, the SECP has set the faces signi cant sustainability challenges, particularly only improve reporting accuracy but also streamline global sustainability standards.
data, enabling stakeholders to evaluate sustainability foundation for greater corporate responsibility in streamline operations such as energy use, waste concerning water usage and carbon emissions. The operations, reduce waste, and optimize resource Conclusion
performance e ectively. Pakistan. While the banking and manufacturing sectors management, and supply chains within a single adoption of digital tools like IoT-enabled irrigation usage, leading to greater operational e ciency and
are making strides, other critical industries like system. This leads to more consistent and timely systems can help optimize water use, reduce waste, and pro tability. Digital tools are transforming sustainability reporting by
According to PwC's Banking Publication 2024 – Road to reporting, especially in Pakistan, where fragmented Enhancing Sustainability Reporting enabling companies to collect, analyze, and disclose ESG
Sustainability, 77% of banking executives expect agriculture and technology must also embrace data systems often present challenges. According to improve crop yields. Companies such as Cropster and data more e ciently. As global sustainability
regulations on sustainability disclosures to tighten within sustainability solutions to mitigate environmental PwC's 2024 report, 62% of nancial institutions have AgriSense in Pakistan are utilizing data management through Digital Tools expectations rise, adopting these technologies has
the next ve years, signaling growing global demand for impact and stay competitive globally. adopted DMPs to centralize ESG data, improving platforms to monitor soil moisture, crop health, and Several leading Pakistani companies have successfully become essential for businesses to remain competitive.
ESG transparency. In line with this trend, the Deloitte CxO Pakistan’s vulnerability to climate change, highlighted by reporting accuracy and facilitating more informed weather patterns. These technologies optimize irrigation adopted digital tools to enhance their sustainability While challenges such as technological gaps and
Sustainability Report 2024 notes that 60% of CEOs now the 2022 oods that caused over $14.9 billion in decision-making. and reduce pesticide use, ultimately contributing to reporting practices, demonstrating the potential for
prioritize climate-related risks, and more than half damages, underscores the urgent need for businesses more sustainable farming practices. This not only helps others to follow suit: regulatory hurdles persist, digital solutions o er
recognize that sustainability will signi cantly in uence across sectors to integrate sustainable practices into their 2) Arti cial Intelligence (AI) and Machine Learning farmers meet local regulations but also positions them signi cant bene ts, including operational improvements
operations. In alignment with the Paris Agreement, (ML): Arti cial Intelligence (AI) and Machine Learning favorably in global supply chains, where sustainable • Engro Corporation automated the collection of and increased transparency.
Pakistan has committed to reducing its greenhouse gas (ML) are essential technologies for analyzing large ESG sourcing is becoming increasingly important. environmental data, including energy consumption By embracing these tools, Pakistan can not only
emissions and enhancing climate resilience. This further datasets, identifying patterns, and predicting future Challenges and Opportunities for Businesses in Pakistan and emissions, resulting in a 19% reduction in energy strengthen its sustainability practices but also position
emphasizes the necessity for businesses operating in sustainability challenges to enhance decision-making. use per unit of production from 2021 to 2023. itself as a regional leader in ESG standards. With the right
Pakistan to adopt sustainable practices. These technologies optimize resource usage, reduce While digital tools o er signi cant bene ts for • Habib Bank Limited (HBL) tracks its carbon investments in infrastructure, training, and public-private
sustainability reporting, businesses in Pakistan face
Moreover, growing investor awareness of environmental waste, and manage carbon emissions. PwC's 2024 several challenges in adopting these technologies. emissions, water usage, and waste management using collaboration, businesses in Pakistan can unlock new
risks and increasing consumer demand for transparency publication reveals that 45% of businesses have Challenges digital platforms, achieving a 5% reduction in its market opportunities, attract international investment,
in business operations are compelling companies in integrated AI and ML into their sustainability e orts. carbon footprint in 2023. and build a more sustainable and pro table future.
Pakistan to adopt more robust sustainability reporting 3) Blockchain for Enhanced Transparency: Blockchain • Overcoming Infrastructural and Regulatory About the Author: Raeenah Junaid Siddiqui, an Associate
practices. With international investors and global supply technology ensures transparency and accountability Hurdles: Limited access to digital infrastructure and • Faysal Bank uses digital tools to align its ESG reports Member of the Institute of Cost and Management Accountants of
chains demanding clear ESG disclosures, Pakistani in sustainability reporting by providing an evolving regulatory frameworks present signi cant with global standards like the Global Reporting Pakistan (ICMAP) and the Pakistan Institute of Public Finance
businesses utilizing digital tools for sustainability immutable, veri able record of transactions. This is challenges for businesses in Pakistan, often resulting Initiative (GRI) and the UN Sustainable Development Accountants (PIPFA), currently serves as Assistant Director of
reporting can gain a competitive edge, attract especially important for verifying ESG claims. In in ine ciencies and hindering the full adoption of Goals (SDGs), facilitating better access to Examinations at ICMAP. She has around seven years of experience of
investment, and enhance consumer trust. digital solutions. international markets. working in the nancial services and education sectors in Pakistan.
industries such as agriculture and textiles, blockchain
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