Microsoft and Novata Expand Partnership to Scale AI-Powered ESG Tools for SMEs

Microsoft and Novata have announced an expanded collaboration to scale AI-enabled ESG solutions for small and medium-sized enterprises (SMEs), with a focus on improving access to sustainability data and reporting tools.

The partnership integrates Microsoft’s Azure AI infrastructure with Novata’s ESG platform, which helps businesses collect, analyze, and act on ESG data. The goal is to reduce the reporting burden for SMEs, many of which lack the dedicated sustainability teams or digital infrastructure that large corporates possess.

This initiative comes amid increasing regulatory expectations and supply chain pressure for companies to meet ESG disclosure standards. With new AI tools, SMEs can track metrics such as emissions, energy use, and labor practices, and benchmark performance across peer groups.

The Asia-Pacific region is seen as a key growth market for this initiative, particularly as countries like Singapore, Japan, and South Korea implement or refine ESG compliance regulations. In Southeast Asia, where SMEs comprise over 90% of businesses, scalable solutions are in demand to ensure broad-based participation in national and regional decarbonization goals.

Microsoft’s and Novata’s joint effort reflects a wider trend in ESG technology: the convergence of artificial intelligence, regulatory readiness, and enterprise enablement. The tools developed under this collaboration are expected to play a growing role in investor assessments and capital allocation strategies across the region.

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Rex Sayson

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