Enterprises' environmental, social, and governance (ESG) programs should not have to fight for capital against digital transformation efforts, but a new survey from 451 Research and Hitachi Vantara shows environmental sustainability is often at odds with other enterprise priorities. The survey also suggests ESG isn't viewed by executives as the business imperative it's often touted as.

ESG is inextricably linked to successful digital transformations, Bjorn Andersson, senior director of IoT solutions at Hitachi Vantara, told SDxCentral. "Part of our impetus for the research was to explore the use cases and priorities at the intersection of IoT, Industry 4.0 and ESG. Rather than siloed business objectives competing for investment, digital transformation and ESG are connected," he said.

If companies invest less money or are under-skilled in IoT, for example, that can pose a threat to their sustainability goals. And the opposite is also true, Andersson explained. "The efficiency improvements from going digital with IoT can put your company in a better ESG position and is also more resilient in reacting to changing priorities," he said.

However, the survey of more than 600 IT leaders found the top motivation for digital transformation is the optimization of business processes and operations, followed by risk reduction, new revenue streams, and cutting costs. ESG was the eighth most important driver of digital transformation, according to the survey, although more than 80% of respondents expect ESG regulations will have at least a medium impact on their business and "significantly increase" in the next two years.

The research also revealed that ESG outcomes from digital transformation aren't currently driven extensively by government regulation. Instead, enterprises target efficiency gains and sustainability mainly as a competitive necessity. "Digital transformation helps make these efficiency improvements, and many of the ESG requirements achieved are almost a bonus," according to the report.

As the effects of climate change continue to impact communities around the globe, Andersson recommends a data-driven approach as ESG becomes an increasingly normal part of business operations.

The majority of companies are in one of two places, he said. They either have more advanced sustainability programs where ESG is built into the company culture, or there's the expectation that it'll become commonplace soon enough. "Being data-driven will be a key way to manage and measure that," he said.

And as "climate change's impact on our lives increases," he expects ESG will be akin to safety and cybersecurity "where ESG is foundational to the way we all do business."