Five Actions for Sustainable Business
Five Actions for Sustainable Business
Embed Sustainable Business Data into your Processes and Networks
Use sustainability data within your business processes to make sustainable and profitable decisions and measure performance. Then share the sustainability performance data, which could include calculated carbon emissions, water use, recyclability, or labor information, with your suppliers, industry associations, regulators, and NGOs.
Gain visibility across functions to collect decision-making insights and measure performance
Using a data-driven approach, businesses need to embed sustainability metrics throughout their business and gain actionable insights across the value chain to enable the transition to sustainable business processes. Collecting and analyzing sustainability data is a key step to achieve holistic sustainability management. Management experts often quote the phrase, “If you can’t measure it, you can’t improve it.”
However, the World Economic Forum reports just 9% of companies are actively using software that supports data collection, analysis, and reporting on their environmental, social, and governance (ESG) activities. And, in a survey conducted by the SAP Insights research center, only 21% of business executives said they were completely satisfied with the quality and availability of data collected for sustainability. The insights from real-time data provide a continuous view on a company’s performance that manual processes based on periodically updated spreadsheets cannot match. Users can drill down into strategic areas within the company and across a business network to make informed decisions based on financial and nonfinancial indicators.
Companies with more data tend to have a more holistic view of their business, which gives them more granular insights into the trade-offs they can make to deliver better overall outcomes. A brand manager, for example, could make a trade-off decision between cost or schedule and the sustainability impact, such as material recyclability or carbon intensity. A CFO can more rapidly and accurately determine the “real” cost of actions or inactions. For example, calculating the cost of a new carbon tax or the cost of not meeting environmental or social standards. Comprehensive sustainability data helps them see the well-being of people and planet inherent to the well-being of their businesses.
Create and share data with trading partners, industry associations, regulators, and NGOs
Regulators, industry associations, NGOs, and investors are increasingly asking companies for sustainability data. At the same time, companies are demanding their suppliers provide detailed sustainability performance information, which has upstream and downstream effects down to the smallest contributors. In the past, doing annual ESG reporting on an ad hoc basis by creating spreadsheets might have been sufficient. But the breadth and depth of the information required is constantly growing as more sustainability dimensions are added, making data sharing more complex and challenging.
Business networks offer visibility, collaboration, and intelligence across supply chains, all of which are essential to attain sustainable performance. Connections between individual suppliers, if kept one-to-one and siloed, limit interaction and reduce collaboration between companies and processes. Cooperating and sharing data across companies and various dimensions of the value chain is precisely what is required for designing, manufacturing, delivering, and maintaining products in ways that minimize carbon footprints, decrease waste, and help ensure social equity. Value chains then become value networks that, together, can achieve sustainability goals much better than any company on its own.
Going beyond a company’s own operations, it’s important to collaborate with other organizations and even competitors to improve the sustainability dynamics across a range of organizations. Initiatives like the WBCSD’s Pathfinder Initiative, for example, acknowledge that complex value chains have limited interorganizational data exchange. Data-centric industry consortia like Catena-X can help move entire industries to more sustainable outcomes.