Digital Technology Advancements and the Future of Sustainability Reporting

Abstract

The traditional tools for measuring, collecting, collating, aggregating, managing, and reporting ESG data and sustainability-related information are being revolutionised by emerging digital technologies (DTs). As these tools become more sophisticated, they offer unprecedented opportunities for businesses to convey their ESG performance and impacts with enhanced transparency, accuracy, reliability, engagement, and in real time. This chapter delves into several emerging or potential applications of DTs that are revolutionising sustainability reporting and auditing to better serve stakeholders in the digital age. As businesses strive to meet the growing demands for transparency and accountability in their sustainability practices, DTs offer innovative solutions to enhance the quality, accessibility, and impact of sustainability-related information. The DTs or DTs-based applications discussed in this chapter include (1) the use of eXtensible Business Reporting Language (XBRL) and Sustainability Disclosure Taxonomies; (2) blockchain and Non-Fungible Tokens (NFTs); (3) satellite imagery and internet of things (IoT) devices; (4) digital twins; (5) artificial intelligence (AI)-powered Natural Language Processing (NLP) and machine learning; (6) advanced data visualisation tools and; (6) DT-powered data analytics. The ensuing discussion highlights the future trajectory of DTs in sustainability reporting, providing a roadmap for businesses looking to innovate in this space. While some companies are already experimenting with these DT applications, others stand to benefit by understanding how these technologies can be seamlessly integrated into their operations. This chapter draws on some of the interview findings (as outlined in Chapter 1 ) to support the discussions.