4 Ways that Data Governance Can Reduce Your Carbon Footprint

Data governance is a set of structures and principles that ensure data is gathered, stored, processed and disposed of efficiently and securely. It provides a framework that ensures that your company’s data is accurate and reliable while making it easy for users to find, understand, and use.

There are a few key reasons why data governance is essential for businesses today:

• Data governance increases efficiency by clearly defining the core data needed to fulfil the company’s objective.
• It reduces security risks: well-structured data is easier to monitor and facilitates compliance with regulations such as GDPR.
• It allows for better analytics for company growth by providing clarity on the most important metrics to track.

Additionally, good data governance is absolutely essential for regulated verticals subject to governmental regulations, such as financial or pharmaceutical companies.

With all this said, it’s evident that data governance is something that all businesses should be looking into if they don’t do so already. However, one benefit of data governance rarely gets mentioned. Have you ever considered how having the right measure of data governance can reduce your company’s carbon footprint? Let’s have a look at the reasons why.

1. Data governance reduces data storage

Data storage has an environmental impact that shouldn’t be ignored. According to MIT, the electricity used by the IT industry amounts to 2% of all carbon emissions, and the Cloud has a larger footprint than the airline industry.

A significant amount of energy is used to store data. Data centres use large amounts of electricity to power and cool servers, and the manufacturing and transportation of the physical devices used for storage also contribute to their carbon footprint. As the amount of data being stored continues to increase, the carbon footprint of data storage continues to grow.

This is especially concerning given that less than 0.5% of data is analysed or used. A considerable amount of stored data may be irrelevant or unimportant to your company’s primary objectives – or it may be duplicate, incorrect, or corrupted.

While some cloud platforms are working towards sustainability (such as AWS, which aims to be carbon neutral by 2025), we are still collectively a long way off from where we need to be to make a significant impact on climate change. In the meantime, every business needs to do what it can in terms of environmental care.

Here’s where data governance comes in. When you clearly understand the data being stored, you can identify and eliminate any unnecessary or redundant data, thereby reducing the amount of energy used to keep it.

Additionally, implementing appropriate data management and retention measures can help businesses optimise their data storage infrastructure. For example, data governance policies can ensure that your business only stores data in energy-efficient locations which use renewable resources.

2. Data governance reduces unnecessary data operations

The environmental impact of computing is noteworthy – running a PC creates on average 12.5 kg of CO2 emissions each month. And that doesn’t include the carbon emissions associated with the production and disposal of computers.

Your business can ensure that there are fewer unnecessary operations by having the right data governance measures. Looking for data consumes power. Generating reports can take hours, which is an issue when there are no data governance policies defining which reports are actually necessary. Your company may generate daily reports when it doesn’t need to. Or several departments may generate similar reports when one shared report is sufficient.

On the other side of the coin, too much data governance can also cause issues. A common mistake companies make is placing too much focus on processes and tools rather than the end goal of making the data easy to access and use. When data governance is too rigid and inflexible, employees won’t be able to quickly obtain the data they need, thus also consuming unnecessary power.

It’s clear – having the right measure of data governance reduces your carbon footprint by making your data operations more efficient with less computing power. When you have a clear and consistent framework for managing data that aligns with your company’s goals as well as the needs of your employees, you reduce the time and resources spent on data-related issues and make better use of your data for decision-making and strategic planning.

3. Data governance reduces time loss for employees

Bad data can waste an employee’s time in several ways. An employee may spend a significant amount of time searching for the correct data in a large and unorganised dataset or trying to correct or validate inaccurate data, leading to delays in completing important tasks or projects. Incorrect decisions or conclusions based on flawed data lead to wasted resources and lost opportunities.

Additionally, cleaning and formatting data is a tedious and repetitive task! Overall, a lack of data governance leads to decreased productivity and lower-quality decision-making.

There are plenty of statistics which illustrate how far-ranging these issues are. Consider the following:

• 71% of data scientists experience difficulty with their analytics initiatives because of the large amount of data, citing that their central challenge is utilising data from a variety of different data sources
• Validity’s State of CRM Data Management in 2022 report found that more than half of admins rated their data accuracy and completeness at less than 80%. Moreover, 64% of the participants said they would consider leaving their current role unless the company allocated more resources to a robust CRM data quality plan.
• One study shows that data analysts spend on average 39% of their time prepping data before they can use it (an improvement from earlier studies which show far higher numbers.)
• 76% of data scientists view data preparation as the least enjoyable part of their work

Not only is the loss of money a concern – the above issues also lead to an increased carbon footprint. Employees who spend more time on data-related problems are more likely to need to take on additional work or work longer hours, leading to increased energy consumption. Businesses also need more employees to fulfil their objectives when unnecessary tasks take up employees’ time.

Additionally, when employees can’t do their jobs correctly, morale suffers. Consider the statistic above, which shows that 64% of employees would consider leaving their job due to the lack of data quality and management. Companies without the right measure of data governance are likely to have a higher turnover. Have you ever considered the environmental cost of onboarding and offboarding employees?

Many companies still rely on paper-based processes for onboarding and offboarding, such as printing out forms and documents for new hires to sign. There are also often increased transportation emissions – employees who are leaving may have to travel for exit interviews, to return company property, or other offboarding activities, while new employees may have to travel for training, orientation, and other onboarding activities.

Even if your business has digitised its onboarding and offboarding process as much as possible – thus reducing your carbon emissions – it still takes time to train employees to a level where they can perform their tasks with the same efficiency as their predecessors. Consequently, they use more resources to perform those tasks than a long-standing employee would.

Well-implemented data governance means that your employees can focus on meaningful work that aligns with your company’s mission rather than wasting time on extraneous work. Data governance also leads to higher employee retention, therefore reducing your environmental impact.

4. Data governance allows the business to expend fewer resources

Businesses waste resources due to poor data governance. Experts estimate that 15-45% of operating expenses are wasted due to data quality issues.

Inadequate data governance also hinders marketing efforts. Marketers report that 21 cents out of every dollar are wasted due to poor data quality. Furthermore, companies who conduct a lead gen program without investing in data waste 27.3% of their sales representatives’ time – 546 hours a year per person.

Flawed data can lead to inaccurate customer information, resulting in a message being sent to the wrong customer or the same message being sent to a customer more than once. Not only is this an unnecessary expenditure of resources – but it can also be frustrating for the customer and damage the company’s reputation.

Furthermore, poor data governance can lead to compliance and legal costs by creating inaccuracies in data used to meet regulatory requirements. Data governance is especially crucial in any regulated vertical subject to governmental regulations. If an organisation is audited and its records are inaccurate, it can lead to non-compliance with regulations and result in hefty penalties.

Alarmingly, 60% of companies don’t measure the annual financial cost of poor-quality data. Clearly, this is a big issue. Businesses without the right data governance expend more resources than they need to reach their goals – whether a case of direct mail sent out to the wrong customers or fines due to non-compliance with regulations. So, naturally, it follows that their carbon footprint will be higher.

Proper data governance means your business can achieve the same results with fewer resources, thus reducing your carbon footprint.

How to successfully implement data governance

Now that we’ve looked at why data governance can reduce your company’s carbon footprint, let’s look at how to implement it successfully.

First, some common mistakes that companies make:

• Not having a clear implementation program. As the saying goes: if you don’t know where you’re going, you’ll end up somewhere else. The foundation of an effective data governance program necessitates knowing precisely what the end goal is and how it will affect your business. The key is to define overall company benefits and goals before considering which tools and processes to use.
• Not having the right measure of data governance. Too much data governance can reduce efficiency and increase your environmental impact as much as too little data governance can. There needs to be a balanced and flexible approach, with an emphasis on bringing value to your organisation and employees.
• Trying to build it alone. Data governance can be hard to understand and implement, especially when a company doesn’t have employees who have in-depth knowledge of the subject. (And if there were, you would likely already have data governance in place!)
• Not highlighting the personal benefit for employees. No one wants more work on an already busy day unless they understand why it’s important for the organisation and how it will benefit their work personally. Many companies fail to communicate this clearly, leading to a lack of motivation and morale for employees.

Now, let’s take a look at the crucial ingredients for success if you want to implement data governance in your company:

Define clear goals

Defining your goals is crucial for ensuring that your data governance efforts align with your company’s overall objectives. What are the desired results, and how do you want to improve your business? Knowing the answers to these questions will help you establish a clear direction and make it easy to measure success.

Additionally, having clear goals and objectives ensures that your data governance efforts align with your company’s overall mission. This will ensure that data governance is viewed as an essential and valuable part of your company’s operations rather than as a separate and disconnected initiative.

Implement oversight and monitoring

Oversight and monitoring are critical components of any data governance strategy to help ensure that policies and procedures are followed and that data is used consistently and appropriately.

Without oversight and monitoring, it can be challenging to detect and address issues related to data quality, security, or compliance. This can lead to negative consequences such as data breaches, non-compliance with regulations, and loss of customer trust.

Creating a bottom-up feedback loop for data governance is an effective way to ensure that the policies established by your business align with the needs and concerns of the employees responsible for implementing them. In addition, it allows your employees to provide input and feedback on the data governance practices that affect their day-to-day work. This will help you identify any issues employees face and ensure that the policies and procedures are practical and effective.

Don’t do it alone

If you don’t have prior experience with data governance, its complexities can be challenging. A consultant can help you develop a data governance strategy tailored to your organisation’s unique needs and challenges, and can guide you in effectively implementing that strategy.

Consultants are also knowledgeable on best practices and industry standards across various verticals. As a result, they can identify where policies or procedures may be lacking or where there may be compliance or security risks.

Additionally, consultants can help train your employees on data governance and provide ongoing support and guidance as your data governance practices evolve.

Ensure that there is transparency and support for employees

When employees understand the importance of data governance and how it will benefit their work personally, they are more likely to follow the procedures you have set and use data consistently and appropriately. This improves the quality of your company’s data, increases efficiency, and ensures compliance with legal and regulatory requirements.

Additionally, when employees have a good understanding of data governance and its benefits, they are more likely to identify and report any issues or concerns related to data management. This ensures that problems are detected and addressed before they escalate into more significant issues.

Explaining the importance of data governance to employees builds a culture of data responsibility and accountability. Company-wide transparency is vital for any data governance initiative to be successful.

Conclusion

The benefits of good data governance are far-ranging. The ability to confidently make data-driven decisions will increase your revenue, and data quality improvement leads to fewer mistakes and higher efficiency. Furthermore, employee satisfaction increases as employees can spend more time on work which matters, rather than becoming bogged down by poor-quality data.

These factors all translate to a reduced carbon footprint. Well-implemented data governance means that only data relevant to your company’s goals is collected and stored, thus reducing the energy used by data centres. Better efficiency in handling data leads to less computing resources expended for the same results. Employees can use their time more effectively, leading to a reduced need for staff and a lower turnover. Lastly, the unnecessary expenditure of business resources decreases, and there is a lower potential for costly fines.

All these factors mean that your business can operate more effectively while reducing its environmental impact. In today’s data-driven environment, proper data governance is essential for companies that want to keep progressing and evolving.