When it comes to sustainability, there are two types of businesses: reactive and resolute.

In reactive businesses, sustainability is driven by external forces rather than internal strategy. Reactive businesses do what they need to do when they are told to do it—specifically, by customers and investors, according to an SAP Insights survey.

Resolute businesses, which represent 12% of respondents in the survey, are taking more action on sustainability than everyone else, and their efforts are more likely to have positive effects on the business.

But what really makes these businesses—which we’ve termed the Resolutes—stand apart is their strong belief that sustainability is directly tied to business competitiveness.

When something affects competitiveness, it becomes strategic. And when something becomes strategic, companies approach it with more rigor and discipline. They invest in it. And they measure it. They expect to get results, and they expect those results to contribute to their bottom line.

In fact, the Resolutes are more likely than everyone else to expect a quick return on their sustainability investments. They also report higher revenue growth than other respondents in the survey and say they are more profitable.

How do they do it? They are more likely than everyone else to be using sustainability as a tool for process improvement and supply chain visibility. But if there’s a (not so) secret sauce to their discipline, it’s their greater satisfaction with their sustainability data.

Let’s look at the Resolutes in more detail to see what makes them successful.

Lofty expectations and lower barriers for ROI.

The Resolutes are 26.4% more likely than everyone else to increase their investment in sustainability during the next three years. And with that greater commitment comes greater expectations. They are also 13.8% more likely to expect payback within the next one to three years—the same heated-up period that drives other strategic investments.

The rigor that the Resolutes apply to their sustainability investments goes hand in hand with their ability to get results. They are 7.0% less likely to say that lack of funding is a barrier to sustainability and 7.3% less likely to experience problems proving ROI.

Sustainability has more positive effects on the business.

With elevated expectations for ROI comes expectations for other kinds of results. And the Resolutes see their sustainability efforts contributing in specific ways to their overall business competitiveness. They are more than twice as likely to say that sustainability contributes to positive business outcomes, such as increased revenue, profitability, and growth. Sustainability also helps them improve the quality of their products and services, make their processes more efficient, and cut costs.

Data is crucial.

How does a company gain rigor and discipline over any investment and achieve positive business outcomes? With data. The Resolutes are more likely than other respondents to report that they are completely satisfied with their data.

One plausible reason for this satisfaction: they’re trying harder. They are measuring seven of nine common sustainability areas—including energy consumption and emissions, air pollution, and resource availability—more often than everyone else. They are also more likely to be collecting their data using direct measurement rather than assumptions and estimates.

A competitive outlook is the key.

We found a strong connection between respondents’ views on sustainability and competitiveness, their satisfaction with data, and their growth. That is, those who see a moderate or strong positive relationship between sustainability and competitiveness (including the Resolutes) are more likely to be satisfied with their data. They also achieved greater revenue and profit growth in 2022 compared to respondents who see a weak relationship, a negative relationship, or no relationship between their sustainability efforts and their company’s competitiveness.

We’ve looked at the characteristics of a Resolute company. So, what actions do you need to take to join the fold? Here are some suggestions:

Think of sustainability as a new element of business strategy.

The end goal for the Resolutes isn’t just to make business processes more sustainable; it’s to make the business more competitive. Continuing to treat sustainability as tangential to business strategy will hurt businesses over the long term.

Just look at IT. There was a time when computers were dismissed as expensive typewriters. Today, IT isn’t just strategic—it’s often the product or service itself. It’s time to think of sustainability in the same way.

Bring rigor to sustainability investments.

The Resolutes treat sustainability just as they would any other strategic investment: they set targets for positive returns within a brief period—and they appear to be getting them.

Taking a reactive approach by basing sustainability efforts on constantly shifting customer and investor demands destroys any rigor. Without discipline, companies may end up with a lot of one-off efforts and duplication—and less certainty about whether sustainability investments help the bottom line.

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