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Bridging the Sustainability Capability Gap

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In today’s world, sustainability challenges affect people’s lives, ecosystems, and businesses. Whether we’re discussing environmental sustainability or people sustainability, the facts of why we collectively need to focus on sustainability are staggering.

With 79% of buyers changing preferences based on sustainability, it is clear that customers are increasingly demanding sustainable products. Investors are incorporating environmental, social, and governance (ESG) factors into their investment decisions, with an estimated 50% of professionally managed assets expected to be ESG-mandated by 2025. And employees are also taking an active interest in their employers’ ESG efforts, with 90% stating that such efforts enhance job satisfaction.

Faced with this reality — and pressure from multiple stakeholders — sustainability has become a critical topic for organizations worldwide, prompting businesses to adopt more sustainable practices.

The Sustainability Execution Gap

The above statistics clearly show that sustainability is not just about compliance with regulations, it is about creating a holistic vision for an organization that supports the strategy and creates a rallying point for employees. Regulations and legislation are increasingly focusing on environmental impacts, making it imperative for companies to have a sustainability strategy in place. Sustainability is about creating a business that is environmentally and socially responsible that can thrive in the long term.

Sustainability is a journey, not a destination. Businesses need to develop a road map that will allow them to advance their business transformation toward a sustainable intelligent enterprise. That starts at the top and the bottom so that everyone within the organization has a role to play in guiding the approach toward success. An overall culture of sustainability needs to be created to ensure participation at all levels.

However, even when the companies understand the need for more sustainable practices, a challenge remains for many on how to close the gap between their sustainability strategy and execution, transforming the whole organization while creating sustainable business value. Understanding the role emerging technologies play and leveraging them is a powerful enabler to close this gap and accelerate sustainable business growth and positive impact.

Emerging Technologies Are Key for Businesses Looking to Become Sustainable Intelligent Enterprises

Technology can help companies improve efficiency in business processes, utilize renewable energy, adopt circular economy practices, increase transparency, and make more informed decisions by providing real-time data and analytics. With the increasing stakeholder expectation for companies to operate sustainably, technology can enable companies to agilely adapt to changing market conditions and customer demands and build trust with their stakeholders. Ultimately, employing the right technology can lead to cost savings, new business opportunities, and a reduced impact on the environment.

Cloud technology can provide real-time monitoring for the usage of sustainable technology, while facilitating remote work and collaboration, reducing the need of scattered physical servers and hardware, and helping cloud providers invest in renewable energy sources to power their data centers. This will help organizations achieve their zero-emission goals while improving operational efficiency and reducing costs.

Artificial intelligence (AI) and machine learning can help many organizations optimize their waste management processes by using predictive analytics to identify potential areas of waste, forecasting demand for recycled materials, optimizing waste collection routes, and automating the process of reporting to track and comply with regulatory requirements. If the “business as usual” scenario is allowed to continue regarding the use of plastics, the oceans will contain 1 ton of plastic for every 3 tons of fish by 2025, and more plastic than fish by 2050. There is a huge opportunity to reduce waste through reuse and recycling processes, as well as building a more sustainable design process for many industries. Internet of Things (IoT) technologies such as sensors and smart meters provide real-time data that can be used to reduce waste and identify recycling opportunities.

Renewable energy sources such as solar, wind, and hydroelectric power can reduce reliance on fossil fuels and mitigate greenhouse gas emissions. Blockchain provides a transparent, secure, and efficient way to track and verify emissions, encourages sustainable practices, and facilitates renewable energy trading. Electric vehicles (EVs) can reduce transportation emissions, while IoT devices can help monitor and optimize energy consumption in buildings and processes. Additionally, advances in carbon capture and storage technologies can enable organizations to capture and store carbon dioxide emissions, preventing them from entering and adversely affecting the atmosphere.

The mindset shifts in the organization — and their role in the business network — also impacts the success of the sustainability efforts and uptake of processes. No single company can achieve sustainability alone. Collaboration among governments, business, technology partners, and industry players bring the necessary capabilities and perspectives to enable this collaboration. There is no need for businesses to walk this alone. Rather a joint and collaborative effort is needed to tackle this issue.

Welcome to Your Sustainability Journey

Sustainability is a strategic opportunity for companies. Whether it be the focus on creating sustainable products, services, and business models for long-term growth, or embedding it into business processes to make sustainability profitable and profitability sustainable, there is no downside. By doing this right, facilitated by the right technology, businesses can earn customer loyalty, attract funding or investment, maintain a committed workforce, and enhance brand image and reputation.

Sustainability requires collaboration as well as a deep understanding of the business and its wider impact, with a commitment to continuous improvement. Companies that can close the gap between their sustainability strategy and execution — and identify opportunities for sustainability in the business — will be well positioned to succeed in the long term.


Claudio Muruzabal is president of Cloud Success Services at SAP.
This piece was originally published on LinkedIn as part of the April edition of the Envision Beyond Journal.

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