Transforming ESG insights into strategic advantages using PwC’s ESG Insight Analyzer on AWS

Overview

As companies adapt to an ever-evolving environmental, social, and governance (ESG) regulatory landscape, they are simultaneously grappling with pressure from stakeholders to accelerate progress on ESG metrics. At the same time, responsibilities to drive value and deliver profits remain unchanged. Customers across industries have expressed concerns about keeping up with these diverse demands. One of the main challenges in this area is to simplify reporting and regulatory compliance, which often translates to managing underlying—often massive—datasets and data sources.

Stakeholders report that data challenges are a common denominator across many ESG ventures. For many organizations, ESG data is often spread across disparate sources, including enterprise resource planning systems, Internet of Things devices, and spreadsheets, among others. But this array of different sources also presents an opportunity to use analytics and visualization tools that can help drive insights by operationalizing and monetizing this data.

The first step in a company’s ESG journey is often to quantify its impact on the environment by measuring its annual emissions of greenhouse gases (GHGs). Insights gained from understanding GHG emissions hotspots often lead to climate action; however, companies currently lack a way to streamline carbon-data acquisition, maintain near-real-time data transparency, and drive value creation from effective carbon-data management. That is why AWS has developed the Guidance for Carbon Data Lake on AWS, which instructs users on how to deploy a carbon data lake to the AWS cloud. PwC used Carbon Data Lake on AWS to build the ESG Insight Analyzer, a tech-facilitated solution that can be used in conjunction with PwC services to help customers effectively manage carbon data and realize value through decarbonization initiatives.

PwC introduces ESG Insight Analyzer using Carbon Data Lake on AWS

Carbon Data Lake on AWS is used to deploy foundational infrastructure that can be extended to support use cases including monitoring, tracking, reporting, and verifying the impact of GHGs. The sample code deploys a data lake along with a processing pipeline that can assist with data ingestion, aggregation, automated processing, and CO2-equivalency calculations based on ingested carbon-emissions data. Upon initial release, PwC offers ESG Insight Analyzer to help showcase carbon-emissions baselining capabilities and relevant decarbonization recommendations that can be followed up on at an operational level.

Because carbon-data management alone does not drive desired customer-business outputs, the aim for ESG Insight Analyzer is ultimately to assess an organization’s ESG risk profile and associated risk mitigators and climate opportunities. These can span a multitude of domains, business processes, and technology systems, including the following:

(Italics indicates features included in the initial release.)

Figure 1: Scopes 1, 2, and 3 of emissions sources, according to GHG Protocol

PwC can also use ESG Insight Analyzer with their proprietary algorithmic analyses of ESG metrics and their consulting experience to help deliver actionable insights and visualizations so that customers can achieve their ESG goals. We are working toward using ESG Insight Analyzer to help in the following areas.

Simplifying reporting and regulatory compliance

ESG Insight Analyzer can integrate existing technology solutions and data (such as from different enterprise resource planning, human resources, and procurement systems) and draw upon industry-specific ESG knowledge to help facilitate reporting and regulatory compliance.

Facilitating decision making

ESG Insight Analyzer, in conjunction with PwC services, can use PwC’s proprietary algorithms, data visualizations, and consulting experience to help highlight information on relevant items in ways specific to a company’s ESG business objectives. This collaboration aims to help produce strategic insights in such areas as risk identification, mitigation strategies, and investment opportunities.

Applying principles of sustainability to help drive production improvements

Through data visualization, predictive analytics, and scenario modeling, users can improve Scope 1, 2, and 3 emissions management and evaluate decarbonization pathways to transform ESG from a reporting requirement to a strategic advantage.

How does ESG Insight Analyzer work?

PwC offers ESG Insight Analyzer to help organizations operationalize their alignment with GHG Protocol. This can be achieved in the following ways.

Data acquisition:

Collecting the requisite activity data from reporting companies in a standardized format, using predefined templates specific to each emission Scope (and to reporting categories, in the case of Scope 3), and identifying the industry-standard sources of emissions factors and acquiring required data

Emissions computation:

Developing a computation engine for calculating emissions for each emission Scope (and for reporting categories, in the case of Scope 3)

Insights visualization:

Developing a front-end tool for insights and visualization of emissions data

Figure 2: ESG Insight Analyzer architecture

First, ESG data is ingested into the Carbon Data Lake raw data zone using standardized CSV-based ingestion templates. For emissions calculations, the required types of data are 1) activity data and 2) emissions factor data. To facilitate this step, data-acquisition templates (ingestion templates) have been designed to collect the data specific to each Scope 3 category. Next, raw data gets assessed and transformed using AWS serverless services and stored in the curated zone. Processed data is further transformed for consumption by dashboards based on React, a library for web and native user interfaces, and these are populated on-demand using Amazon API gateway, which lets companies create, maintain, and secure APIs at any scale.

Figure 3: ESG Insight Analyzer homepage

Figure 3 shows the initial landing page for ESG Insight Analyzer. Each card represents a different capability within the tech-facilitated solution. From here, the user can navigate to any of the available capabilities by selecting continue in the desired card or by selecting the desired capability in the navigation ribbon across the top of the page. The user also has the ability to jump directly to an individual supplier’s profile from the dropdown menu in the top right-hand corner.

Figure 4: Emissions baseline—Supplier Profile page

The user has the ability to drill into a supplier’s contributions to their overall emissions from a number of perspectives.

Figures 5, 6, and 7: Emissions baseline—Scope 3, Sustainability Center

Sustainability Center is the beating heart of ESG Insight Analyzer because the tool was initially developed around Scope 3 emissions and supplier profiling. From this page, the user finds assessments of various key metrics aggregated across their Scope 3 emissions sources, such as top emissions categories based upon location—at a level of granularity as fine as a facility-by-facility comparison of risk levels.

Figure 8: Emissions baseline—GHG Emissions baseline screen

Similar to the Sustainability Center page, the GHG Emissions screen can give users various overarching insights across their Scope 3 emissions profile.

Figure 9: Emissions baseline—Scope 3, Category 1, Purchased Goods and Services emissions screen

Once emissions are broken down by reporting category, users have the ability to drill into their Scope 3 emissions, helping to develop a vital understanding of some of the risks associated with supply-chain operations.

Figures 10 and 11: Emissions baseline—Scope 1 and Scope 2 screens

Users can view their Scope 1 and 2 emissions at varying levels of granularity, including totals by activity over time and by location, if desired.

PwC and AWS continue to build, expand, and refine complementary assets as the two teams draw upon the expertise of ESG and industry subject-matter professionals to help deliver customer-focused solutions. Today, ESG Insight Analyzer focuses on Scope 1, 2, and 3 GHG emissions calculations and insights, with additional capabilities related to other environmental and social metrics to be added in late 2023 and 2024. Check out PwC’s sustainability solutions powered by AWS.