Increasing competitiveness with product-centric ESG reporting

ESG compliance is no longer a nice-to-have. It has become essential for competing in an increasingly sustainability-conscious market, saving resources and costs, and meeting ever-stricter regulatory requirements. Regulations such as the European Commission’s Corporate Sustainability Reporting Directive (CSRD) or the Supply Chain Act require companies to report ESG data transparently. While many organizations still rely on document-centric approaches and struggle with isolated solutions, a strategic competitive advantage is emerging elsewhere: product-centric ESG reporting.

What is ESG reporting?

Sustainable business practices have many facets. The ESG approach breaks them down into three core dimensions:

• E = Environmental
• S = Social
• G = Governance

In an ESG report, companies provide information on all three areas. This includes data such as CO2 footprints, energy consumption in production and operations, as well as information on promoting biodiversity and reducing waste. It also covers aspects like compliance with fair labor conditions and human rights, ensuring diversity, implementing effective risk management and compliance practices.

Data management is key in ESG reporting

This data – especially environmental KPIs – are often scattered across multiple sources: internal IT tools, external environmental databases, or supplier and partner systems. For many companies, preparing an ESG report therefore comes down to one central question: How can reliable ESG data from diverse sources across the entire value chain be collected and analyzed?

A bar chart with three bars on the topic
Companies consider the multitude of data sources and the varying data quality to be among the biggest challenges in ESG reporting. (BARC GmbH 2024)

One key solution lies in anchoring ESG reporting directly within product development – specifically, in the PLM system. This is where crucial data across the entire product lifecycle is stored: information about the product portfolio, the materials used and their sourcing, emissions from production and the supply chain, as well as data from later lifecycle phases such as use, disposal, and recycling. With this structured and traceable data foundation, a PLM system provides the ideal basis for a precise, transparent, and strategically valuable sustainability assessment.

Product-centric single source of truth as an enabler

An open integration platform like CONTACT Elements offers another crucial advantage for ESG reporting: it seamlessly incorporates information from a variety of internal and external sources. Through APIs, it exchanges data with third-party systems such as ERP tools. Supply chain information can be integrated via standardized exchange formats like the Asset Administration Shell (AAS) or data ecosystems (such as Pontus-X or Catena-X). This makes the platform a single source of truth for company-wide ESG reporting.

A schematic representation of ESG reporting based on the CONTACT Elements platform.
ESG reporting powered by CONTACT Elements.

Ideally, such a solution comes with built-in capabilities to assess and analyze the data. For example, CONTACT Elements uses AI methods to evaluate data quality. In the next step, powerful modules – such as for calculating the Product Carbon Footprint – then generate a compliant ESG report. This creates a comprehensive, audit-ready reporting that meets all market-specific requirements.

From ESG reporting to a sustainability strategy

Companies that rely on product-centric, integrated solutions like CONTACT Elements don’t just tackle the mandatory task of ESG reporting – they have the chance to strategically embed sustainability across the organization. For example, ESG data in CONTACT Elements can be directly linked to product structures and development processes. This allows developers to make early assessments of potential CO2 emissions across the product portfolio or in specific manufacturing processes, and to optimize them in a targeted way.

The result: sustainable innovations, more attractive products, streamlined processes, and lower costs. The foundation for this is always a software platform like CONTACT Elements: open, scalable, and equipped with powerful business applications.

Learn in this article by consulting firm CIMdata how companies can systematically embed sustainability in PLM to reduce their environmental impact across the entire product lifecycle.

Trustworthy data exchange with Gaia-X

In today’s data-driven world, secure and efficient data exchange is a crucial competitive advantage. Companies must be able to integrate and share data from various sources without losing control over their own data. This is where Gaia-X comes in: a flagship project of the European Union that creates a secure, trustworthy, and sovereign data infrastructure for Europe.

In our Research Area Data & Service Ecosystems at CONTACT, we’re working to make the vision of Gaia-X a reality. A key part of this is seamlessly connecting data management systems to Gaia-X-based data spaces.

What is Gaia-X, and why is it important?

In an increasingly globalized and data-driven world, it’s crucial for companies to maintain control over their data while still benefiting from data exchange. Gaia-X provides the framework for this: its core concept for a federated data infrastructure allows platform providers, cloud services, and data holders to communicate and exchange data securely and in compliance with legal requirements.

Gaia-X doesn’t aim to replace existing data infrastructures; instead, it connects them to create an open, interoperable ecosystem. To understand the significance of this shift, it helps to look at the differences between data platforms and data ecosystems:

Data platforms typically operate on a centralized model. Data is copied and uploaded to the platform, allowing other parties to download and use it. The problem with this is that copies of the data exist everywhere, and all participants must trust the platform operator to manage the data securely and correctly.

In contrast to a centralized data platform, in a data and service ecosystem, the operator’s role shifts to that of a federator. This federator offers “federation services” that enable participants to find each other, establish trust, and exchange data directly without a central entity managing or controlling the data.

The core pillars of Gaia-X form the foundation for a trustworthy and future-proof data ecosystem:

  • Trust & transparency: Gaia-X establishes clear rules for data governance, security, and data protection. The system is designed from the ground up to be compliant with the GDPR (General Data Protection Regulation), ensuring user privacy and data security.
  • Interoperability: By adhering to open standards and interfaces, data and services move freely between compliant providers.
  • Portability: Businesses can easily move their data and applications between different Gaia-X-compliant providers without vendor lock-in. This fosters competition and gives companies the flexibility to choose the solutions best suited for their operational needs.
  • Sovereignty: Data sovereignty remains with the owner at all times. Businesses retain control over the access and use of their data, in strict compliance with European laws and values.

Gaia-X is thus an important step towards Europe’s digital sovereignty, offering companies the opportunity to drive innovation, develop new business models, and simultaneously retain control over their valuable data.

Requirements for participating in the Gaia-X ecosystem

Participating in the Gaia-X ecosystem opens up numerous opportunities for companies but also requires fulfilling certain demands.

  • Compliance with the Gaia-X Trust Framework: This includes adherence to rules and guidelines for data governance, data security, data protection, and interoperability.
  • Operating your own infrastructure: Typically, operating your own infrastructure is necessary to ensure full data sovereignty. This might include running an object storage (like S3), a Self-Sovereign Identity (SSI) solution, or other necessary services.
  • Implementation of security measures: Companies must implement appropriate security measures to protect their data and systems from unauthorized access, loss, or damage.
  • Adherence to standards: Gaia-X relies on open standards and interfaces for interoperability between different systems and platforms.

Conclusion

Gaia-X is Europe’s strategic response to the challenges of the digital era. By creating a trustworthy, interoperable, and sovereign data ecosystem, Gaia-X enables companies and organizations not only to securely store their data but also to share it in a controlled manner and use it intelligently.

This not only fosters innovation and new business models across industries but also ensures a fair competitive landscape where even smaller players can benefit from the potential of data-driven value creation. Users and companies regain control over their data, forming the basis for transparency and trust in the digital space.

Discover in our next blog article how we are laying the foundation for federated data exchange by connecting CONTACT Elements to Pontus-X.

Visual programming with no-code solutions for the digital twin

In today’s data-driven world, digital twins are essential for optimizing processes and boosting efficiency. However, many businesses struggle to get started, especially when specialized resources are unavailable. This is where Power Apps comes into play: a purely visual development tool for creating digital twin applications that requires no in-depth programming knowledge.

Power Apps: A simple and effective programming foundation

Power Apps is built on the JavaScript library Blockly, which provides a visual programming interface. Users can implement programming concepts like variables, loops, and logical expressions using graphical blocks – no coding required. This intuitive approach enables them to create digital twins with just a few clicks.

CONTACT Elements: The platform for digital twins

Power Apps is part of the CONTACT Elements platform, which seamlessly connects all data and processes from the initial idea to the recycling of a product along the digital thread and accelerates digital transformation. Users can create, manage, and optimize digital twins of products, systems, or processes – customized and without complex backend programming.

Easy integration of simulations, data analytics, and AI

With Power Apps, automated interfaces to existing systems and data sources can be implemented more quickly, streamlining data flow to the digital twin. Python scripts enhance the platform with advanced algorithms for simulations or machine learning (ML). Libraries like TensorFlow or Pandas allow for precise predictions of machine and system states. Based on this, simulations offer a targeted analysis of various scenarios and their effects on systems.

Results such as KPIs or time series data can be integrated into business processes in the Elements platform – perfect for industries like manufacturing, healthcare, or energy that rely on accurate forecasts.

Flexibly adapt applications

The intuitive user interface of Power Apps makes it possible to develop customized applications and adapt them to specific requirements with just a few clicks. Data from documents, sensors, or simulations can be processed, calculated, and visualized directly on the digital twin’s dashboard.

No more IT barriers or complex approval processes

Power Apps requires no complex IT tools or approval processes. Users can create, customize, and share applications directly in the CONTACT Elements platform, allowing them to react quickly to new requirements.

Conclusion

Visual programming with innovative solutions like Power Apps in CONTACT Elements makes it easier to create and automate applications for digital twins. Without the need for extensive IT infrastructure, digital twins become accessible to businesses of all sizes.

Key benefits at a glance:

  • Rapid development: Iterative adjustments and real-time user feedback.
  • Optimization through simulation: Incorporate insights from analyses directly into models.
  • Integration into business processes: Seamlessly embed results into workflows or service cases.

The simple and flexible creation of digital twins opens up new opportunities for companies to increase efficiency and drive innovation.