What will it take to make sustainable business a reality—before it's too late? Back in 2018, the United Nation's Intergovernmental Panel on Climate Change report indicated that CO2 emissions needed to be cut 45% by 2030, as compared with 2010 levels, to limit global temperature rise to 1.5 degrees Celsius by the end of the century. Yet, despite a considerable quantum of discussions around the topic, the progress on the ground has fallen short. A UN report from October 2022 puts the planet on track to warm 2.5 degrees by the end of the century.
As the upcoming COP28—the 28th Conference of the Parties to the UN Framework Convention on Climate Change—approaches, the global community is gearing up for a pivotal moment in addressing climate change and identifying sustainable solutions. In parallel with this event, the inaugural COP28 Business and Philanthropy Climate Forum is poised to unite business and philanthropy leaders with policymakers. Through key partnerships with global organisations, this forum aims to foster collaboration and accelerate solutions to the climate challenge. In a world where climate action is paramount, the role of businesses and philanthropy communities is indispensable in contributing to a fully inclusive COP28 agenda.
These efforts only reiterate that the call for environmental action has become more urgent than ever. As a result, stakeholders today are demanding greater accountability from leaders on the commitment to sustainability targets. For instance, as per recent consumer research conducted by the IBM Institute for Business Value, almost two in three (64%) said products branded as environmentally sustainable or socially responsible made up at least half of their last purchase. This figure was even higher in India at 75%.
Even more significantly, almost half the respondents said they paid an average premium of 59% for products branded as sustainable or socially responsible. Roughly one in three of those who changed jobs in the last year said they accepted a lower salary to work for sustainable or socially responsible organisations. Not surprising then that almost half of the CEOs said increasing sustainability is one of the highest priorities for their organisation in the next two to three years—up from roughly a third in 2021.
For organisations, the goal is clear. They must reframe their sustainability strategies and make bigger strides towards solving the complex problem of climate change.
Here are five points to think about:
Sustainability Is A Business Driver, Not Just A Social Responsibility
Increasingly, CEOs realise that a sustainability focus will enhance business rather than take away from it. Over 80% of CEOs expect sustainability investments to produce improved business results within five years. While the nature of the results might not be evident immediately, incorporating sustainability goals into the broader strategic objectives from the outset can help clarify the business value created by sustainability.
Data And Digital Technologies Can Fuel Sustainability Measures
Around 44% of CEOs saw a lack of insights from data as a top challenge to meeting their organisations' sustainability goals. Adoption of technologies such as artificial intelligence, cloud and blockchain can help organisations access the data and insights needed to inform sustainable operations and inspire innovation. Advanced data management capabilities, fuelled by open standards and interoperability, play a big part in helping leaders improve sustainability outcomes. For instance, in a manufacturing set-up, installing sensors on machinery can help to better monitor energy usage and drive efficiency.
Sustainability Must Be Embedded Into Structures And Processes
When sustainability is an integral part of the business strategy, it is also purposefully reinforced through operational structures. This includes compensation packages, enterprise change management programmes and active employee engagement initiatives. What is measured gets managed, so leaders need to create and communicate clear targets that teams are expected to hit. For example, displaying real-time energy usage and incentivising positive actions can promote more responsible behaviour in employees.
Sustainability Needs To Be An Organisation-Wide Focus
Rather than assigning the responsibility for sustainability only to a single individual such as a chief sustainability officer, sustainability efforts are likely to be far more effective when sustainability is a shared responsibility. The sustainability agenda must be driven from the top. This can drive an internal movement towards wholesale enterprise transformation that can provide the momentum to achieve their goals. Even something as simple as leaders proactively sharing progress on sustainability and setting goals during company town hall meetings can signal the emphasis on sustainability within the organisation. For example, in some organisations, the sustainability focus extends across operations, product design and technology use.
It Takes A Village—An Ecosystem Of Partners And Suppliers—To Meet Sustainability Goals
As they say, one person cannot whistle a symphony. To bring truly sustainable change, there need to be sweeping changes that transcend individual organisations. Leaders must work together to set specific targets, define the metrics they will use to measure success, and jointly report on the progress they have made.
The writing on the wall is clear: Organisations that rise to the challenge will be rewarded by consumers, investors and partners alike, but the late movers will fall by the wayside.
Akhtar Ali is VP, IBM India Systems Development Lab and Technical Computing Development.
The views expressed here are those of the author and do not necessarily represent the views of BQ Prime or its editorial team.
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