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Navigating the Digital Transformation of ESG with AI — and Chaitra Vedullapalli

Navigating the Digital Transformation of ESG with AI — and Chaitra Vedullapalli

Most companies have developed environmental, social, and governance (ESG) strategies to guide their decision-making and actions. More than 90% of S&P 500 companies now publish ESG reports, while 70% of Russell 1000 companies do. 

With ESG programs, companies typically seek to reduce their environmental footprint, build diverse and inclusive workforces, and create equal opportunities for all workers. In addition, they seek to do social good in the communities they serve and meet regulations in key regions. These actions help companies create a sustainable business that can flourish over the long term. 

The Purpose of This Blog

This blog aims to provide IT and ESG teams with insights into how they can develop and optimize ESG programs with technology to improve business outcomes. 

Host Michelle Dawn Mooney welcomed guest Chaitra Vedullapalli to Device42’s podcast, The Hitchhiker’s Guide to IT, to discuss ESG and its digital transformation with artificial intelligence (AI). Vedullapalli is the co-founder and president of Women in Cloud and co-founder and CMO of Meyla. The podcast episode is available for viewing here.

In her twenty-six years in technology, Vedullapalli has driven billion-dollar expansions for Microsoft and Oracle. In addition, she has been recognized with the Forbes 1000 Next Entrepreneur and Microsoft Women’s Leadership awards. Vedullapalli’s mission is to generate $1 billion in net-new economic access for women, entrepreneurs, and professionals by 2030 by developing global partnerships with corporations, community leaders, and policymakers. 

Host Mooney asked Vedullapalli to share more about her philosophy and way of working with companies. 

Vedullapalli said three things drive her. As an engineer, she is inquisitive and constantly considers if there are different and better ways to solve the problems she and her clients encounter in business. In addition, she collects frameworks to analyze and solve business problems. And finally, she curates teams of amazing people to work on global problems that can improve the world. 

These personal and professional qualities are why Vedullapalli is fascinated by the work happening in the ESG ecosystem. She sees opportunities for leveraging technology, including AI, to accelerate ESG transformation and improve business outcomes. 

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Defining ESG and Its Impact on Companies 

Host Mooney asked Vedullapalli to define ESG. Vedullapalli said ESG “is a three-letter word, making waves and shaking up all the boards, presidents, and CEOs in the corporate ecosystem.” 

Vedullapalli said ESG is a movement for transforming how businesses operate and make decisions. Leaders use ESG strategies, objectives, frameworks, and metrics to evaluate their companies’ sustainability and ethical impacts worldwide.

The common phrase that people use to talk about ESG is “people, planet, and profit.” According to Vedullapalli, ESG provides a holistic view and framework to accomplish these goals.

Enterprise ESG Dilemmas Are Increasing

Corporate leaders are grappling with several issues right now that touch on ESG imperatives, according to Vedullapalli. 

Companies are using generative AI to create co-pilots that guide employees through role-based processes. In addition, enterprise leaders are navigating an economic downturn, which has created significant business and budget constraints. The political landscape is changing, both in the US and globally. Geopolitical conflicts are creating new pressures for companies regarding how they operate and care for their employees. And finally, stakeholders are applying pressure on companies to evolve their governance and policies and increase the diversity of their supplier base. And with ESG frameworks and tools evolving, there’s no single solution executives can use to consider all of these variables and craft the right ESG response at the right time, said Vedullapalli. All of this is creating greater complexity for leaders. 

Considering ESG Criteria with Enterprise Adoption of AI Solutions 

Host Mooney asked how ESG priorities impact enterprise adoption of AI solutions. 

Vedullapalli said that enterprise leaders consider both the user experience and ESG criteria as they develop generative AI co-pilot solutions. Co-pilots automate manual work, enabling employees to focus on strategic duties and do more with fewer resources. Co-pilots can also provide access to knowledge resources, enabling new talent to acquire subject matter expertise or employees to gain insight into different topics, roles, and functions. As a result, co-pilots can help companies develop all employees’ skills, including those of diverse talent.

Beyond co-pilots, companies are using AI to automate more workflows. As a result, enterprises need to implement governance, and teams need to use responsible AI principles and practices to develop new solutions and prevent biases. She gave the example of developing AI tools that automate candidate profiling processes. Companies need to make sure these tools aren’t biased against women, veterans, African Americans, and South Asians, among other underserved groups.

“So as a CEO or executive of a company, you have to establish that governance infrastructure. And you are working collectively to ensure those policies are built, and the technologies support those policies rather than the other way around. And it will make a big difference in adopting AI [and ensuring that it is] sustainable,” said Vedullapalli. 

Using AI to Remove Buying Process Friction

Switching gears, host Mooney asked Vedullapalli to discuss how B2B customer buying patterns have changed and how leaders can support that shift. 

Vedullapalli said the shift began when Amazon offered a simpler buying experience for B2C customers, and big brands took note. During the pandemic, enterprise leaders realized they needed to connect with B2B customers in new ways and make it easier to purchase SaaS solutions. As a result, hyperscalers like Microsoft, Google, and Amazon built channel marketplaces so that customers can buy directly through these partners on their sites. 

“So now we are seeing billions of dollars flow through these marketplaces. That means every company needs to know how to leverage this new sales route, a marketplace engine to put offers out there and ensure that customers can buy [without experiencing process friction],” said Vedullapalli. She said she expected 60% of all technology buying to occur through marketplaces within five years. Companies that haven’t yet embraced this sales mode must do so, or they will begin losing sales. 

How Leaders Are Navigating Marketplace Change

Host Mooney asked Vedullapalli how leaders were navigating marketplace complexity and what they could do to become more adaptable to change. 

Vedullapalli recently wrote an article in Forbes, Seven Pivotal Strategies to Accelerate Your Executive Gravitas in the 21st Century, which touches on this topic. 

Leaders can manage through chaos by building trust with people, which takes time at a point in history when leaders want to move faster than ever. 

In addition, leaders can cultivate their curiosity by having an open mind, leaning in to understand different perspectives, and then operating as a diplomat and finding a solution that works for different stakeholders. This can be challenging for leaders, as they need to relinquish control and let go of “do or die” mindsets.

“It cannot be me versus you. It should be a “we” mindset,” said Vedullapalli. 

How Technology Companies Can Improve DEI Effectiveness  

Host Mooney asked Vedullapalli how technology companies can increase the effectiveness of their diversity, equity, and inclusion (DEI) programs to engage with underserved communities. 

Vedullapalli recommended that leaders:

  • Build the company’s DEI brand: Leaders should consider what it would take for their companies to be known for representation and inclusion in their ecosystem — and then implement programs and practices that create equal opportunities for all employees. 
  • Develop women’s leadership and technical skills: As President of Women in Cloud, Vedullapalli works with Fortune 500 brands to increase the number of women leaders at these companies, help them develop executive gravitas, and take on more challenging initiatives.

  • Help women envision a more significant role for themselves: Women may want to do more public speaking, advise policymakers on AI or other top trends, or mentor founders or new talent. Companies can help create these opportunities for their employees.

  • Provide more support for female employees: Enterprises can keep women in the workforce and help them develop their careers by offering policies such as remote and hybrid work, robust healthcare and family leave programs, corporate site security to protect those working late, and more. With these policies, companies show women they value them as human beings, not just as workers.

Using ESG to Differentiate Companies in a Competitive Marketplace

Host Mooney asked Vedullapalli for concluding thoughts. Vedullapalli said leaders should take time to understand the ESG ecosystem: what their company seeks to achieve; and how it can incorporate ESG strategies, principles, policies, and metrics within its operating model. 

Next, they could curate a set of people who can drive innovation with sustainability at their company rather than waiting for top-down mandates to drive these actions. 

And finally, they should collaborate with ESG and other communities to develop the right go-to-market strategy for brand building, talent recruitment, and talent nurturing. Vedullapalli invited listeners to join the Women in Cloud ecosystem to learn more about these and other issues. 

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