Aug 10, 2022

Data Privacy And ESG Are Meeting. Are You Paying Attention?

Privacy is much more than a consumer issue –– or an adtech issue –– it’s now part of driving sustainable growth.

We live in turbulent times. The pandemic, supply chain disruptions, and inflation continue to roil markets across the world. We’re also witnessing new connections between businesses and social areas of concern. Consider examples such as how healthcare relates to social justice and how supply chains impact economic vulnerability.

Another major change is the convergence of two topics that have drawn an enormous amount of scrutiny of late — privacy and ESG (Environmental, Social, and Governance). What might be overlooked in the noise and buzz, though, is how technology can turn that linkage of privacy and sustainability into a growth strategy.

Privacy Concerns

It’s been evident for some time that consumers are getting more and more outraged by the misuse – if not abuse – of the data that they share with brands and technology platforms. It’s been that wave – which regulators and politicians have recognized – that drove Google to announce that it was going to abandon cookies by the second half of 2024.

That same wave has motivated the recent bi-partisan investigation of technology companies by a Congressional committee. European regulators are way out in front of the U.S. In fact, the complexities of managing your policies to be compliant with Europe – GDRP – and California, with the CCPA – creating unprecedented challenges. The risks are both fees – more than $1.2 billion in Europe – and lasting reputational damage.

And if you look that this wave will subside, consider that privacy is also prominently featured in the United Nations 17 Sustainable Development Goals, especially numbers three, nine, and twelve. As the UN states in its guidance on data privacy, ethics and protection, “ [The] right to privacy is a fundamental human right.”

Put simply: data privacy has been elevated to a level that no CEO can ignore.

Privacy And ESG Collide

At the same time data privacy has become top of mind for CEOs, ESG has emerged as a major corporate responsibility—and a driver of investment decision-making.

A misperception among some CEOs is that investing in ESG compliance will somehow eat into the profits of the business. But data tells a different story. Put simply: companies who score highly on ESG measures also perform better and drive more profitable results.

While much of the ESG focus has been aimed at areas like carbon emissions or DEI (diversity, equity, and inclusion), the topic of data privacy (or the lack of it) has become an elevated area of scrutiny of late. There’s even a clear trend where terms like “privacy” and “data governance” are increasingly showing up in corporate 8-K and 10-K filings.

Smart leaders are already trying to get ahead of the curve to show how they and their organizations are revisiting their approach to the privacy of the data they collect in the context of their ESG efforts.

Amy Matsuo, the U.S. regulatory insights practice principal and national lead at KPMG, was quoted by Legaltech News as saying: “In the context of investor demand for a broader ESG strategy, data privacy, data protection and digital ethics are now critical components of a strong ESG proposition. Organizations are increasingly embedding privacy into the design, operation and management of new applications, including IT systems, AI platforms and digital business practices to more robustly prevent privacy vulnerabilities.”

Investors are also leaning into insights provided by organizations like the Sustainability Accounting Standards Board (SASB) or Morgan Stanley Capital International’s Emerging Markets Index, who are now taking a deeper look at how companies are embracing data privacy and governance, in combination with cybersecurity investments, as part of their sustainability and ESG efforts.

Driving Sustainable Growth Through Technology

But the opportunities that result when data privacy and ESG can positively join forces are easy to overlook in the face of massive challenges, such as contending with a slowing economy combined with rising inflation. CEOs are under brutal pressure to drive results and they need ecommerce performance.
Which makes now the time to move beyond the Privacy Trade-off Myth. Technology now exists where both goals—personalization and privacy—can be tackled simultaneously.

Smarter advertising and digital technology can become a partner in driving ESG goals, actually no different than reducing emissions, while simultaneously addressing privacy concerns.

At our company, we have pioneered SORT™ – a technology platform that delivers superior performance not only without cookies, but also without storing any data. That’s one example of many of where technology can support the intersection of privacy, data and ESG; another is the need to invest in your cybersecurity posture, given the amount of PII (personally identifiable information) that is stored on-premise and in the cloud.

Pulling this thread still further – and another dimension of the complex intersection of ESG and data – is the environmental impact of powering those data-hogging servers.


The big lesson for business leaders and investors is that data privacy is now a major part of every company’s ESG efforts. The upside is that by embracing and pursuing new technology that protects user’s data while also allowing for personalization, you can protect people and the planet—while driving profits. That’s a win-win-win for all stakeholders involved.