In 2024, many companies in the EU will have to adhere to more detailed sustainability reporting standards. Beyond the extended suite of regulations, companies also face increasing pressure from investors, partners and customers to contribute to society while reducing their environmental footprint. Further, it’s also a matter of risk management.
For those who succeed in adapting to the new landscape, it’s not “only” about doing good; economic and competitive advantages await ahead. Seizing the sustainability opportunity though requires new operating models supported by new data flows. But before we even look at implementing ESG, we need to set up a strong foundation that is cloud-enabled and AI-driven.
Cloud-first approach at Swedbank
How do you make cloud happen then? At Swedbank, it was the insight “have a cloud-first strategy or be left behind” that initiated the bank’s change process. The Enterprise Analytics Platform (EAP) journey started in 2017 and within a year, an operational data lake that could support both analytical and non-analytical use cases was ready on-premise. After that, the process went fast as Swedbank “pulled off the plug on the on-premise setup”.
The vision was clear: Swedbank wanted to empower the business by futureproofing advanced analytics through a platform to enable secure and fast delivery through value. However, operating in a regulated environment, Swedbank had to consider several aspects around risk, compliance and security. Every department of the bank was involved in this journey upfront to identify the challenges and jointly explore the solutions.
Over the next 16–17 months, the on-premise solution was seamlessly migrated to the Microsoft Azure Cloud with a joint team comprising of experts from Swedbank, Microsoft and Cognizant. What is more remarkable is that this project was delivered during the pandemic, meaning minimal face-to-face interactions and collaboration through Teams – a testimony to the strong collaboration and trust between Swedbank and its strategic partners – Microsoft and Cognizant.
The foundation for becoming AI-driven
What were Swedbank’s success factors? Involvement, training and commitment from the business to be able to mobilize the needed resources. Among other things, Swedbank introduced a phase-wise cloud transformation approach and in each phase, measurable goals were defined. In the first phase, solution and design, avoiding “big bangs” and creating an MVP helped to transform in an agile and manageable way. In the next phase, migration and implementation, processes were automated with the same functionality as on-premises. The last phase is the enhancement phase, which is about improving and adding new capabilities, as well as onboarding new users.
Swedbank’s future vision is about leveraging AI. The platform is built to cater to the needs of the whole bank when it comes to AI, and Swedbank is now on a scaling journey wishing to go from being data-driven to AI-driven.
Embrace cloud for data modernization
The increased demand for a data-first approach, with a high level of standardization and transparency, is challenging for companies that still heavily rely on siloed, spreadsheet-based processes. Today, only 15 percent of institutions have a systematic data collection process in place to identify and collect the data needed for climate-related risk management, according to Noah Nzuki, Cognizant’s ESG expert.
What to do then? Embrace cloud for data modernization, tools, systems and processes optimization to maximize business value. This is also where Cognizant has its expertise. You need to look upon it as a maturity journey where you start using data intelligently. Companies that utilize cloud show increased capabilities in four domains crucial for successful ESG integration: faster time to market, innovation capabilities, risk reduction and scalability.
Cloud for sustainability at Microsoft
At Microsoft, cloud solutions are built for sustainability with data and AI solutions. The company has strong ambitions when it comes to sustainability and has set a vision for a net-zero carbon economy. The company is committed to operating with 100 percent renewable energy in 2025 and by 2050, all historic emissions are to be removed.
Its Azure specialist Henrik Steepler says that sustainability is a value chain effort; up to 90 percent of an average company’s resource footprint occurs outside company walls, either upstream or downstream. As a company moves into the cloud, its impact also moves to another scope. What’s so good about the cloud in a sustainability context (beyond using shared resources) is that it offers more data that can be used to calculate emissions in detail. Microsoft provides several tools and solutions that help clients unify data to improve monitoring and managing of their environmental impact, like the emission impact dashboard for Azure.
To summarize the learnings from Swedbank, Microsoft and Cognizant, utilizing the cloud for ESG and business purposes is quickly becoming a must to remain competitive.