Sustainability and digitisation: A forward-looking approach for companies
- Lizzie Black and Lance Younger
- July 1, 2022
‘Transformational sustainability occurs when sustainability becomes an integral part of an organization’s business strategy.’
Sustainability talk is turning into action.
Based on the responses of 3,000 CEOs across 40 countries in 28 industries, IBM’s ‘Own your impact’ report looks at how transformational leadership is driving a progressive approach towards tackling sustainability.
Leaders can be quick to comment on the difficulty of measuring ROI, coupled up with data and technology challenges, however it comes down to the right kind of leadership to strategically embrace digital technologies to drive sustainability outcomes.
“Today, sustainability is something that all the organization stakeholders– collaborators, shareholders, customers–are demanding.”
Juan Carlos Mora Uribe, CEO of Bancolombia
It’s a continuous process. Some CEOs see opportunity where others see cost and choose to leverage digital capabilities and innovation. 39% of leaders recognise environmental factors play an important factor for companies’ sustainability efforts (figure 1), where they see it as being twice as important as cash flow (figure 2) over the next 2-3 years.
More than 80% of CEOs now expect sustainability investments to produce improved business results within 5 years; this is where digital solutions can help. They can break down data silos, enable new insights and align sustainability objectives with business goals.
“The more investors choose to direct their investments to companies focused on sustainability, the more accelerated the transition will be.”
Felipe Nascimento, CEO of MAPFRE Seguros
A certain kind of leadership: types of CEOs tackling the challenge of Sustainability
- Assessing CEOs (15%) – organisations have no investments in sustainability
- Complying CEOs (29%) – organisations’ sustainability investments are made purely to align with industry mandates or regulations
- Operational CEOs (43%) – extend their sustainability approaches and investments beyond compliance and into their business
- Transformational CEOs (13%) – go ‘all in’ on sustainability, with investments and approaches intended to transform the enterprise by building sustainability into its organisational fibres. Sustainability is sees as a catalyst for fundamental change
Transformational CEOs are focused on the right leadership, open innovation and technology. They help cultivate the right team and drive sustainability from the top down to have a lasting impact. Nearly 70% of Transformational CEOs are confident that their digital infrastructure enables new technology investments to efficiently scale and deliver value (figure 3).
“Promoting change in an inclusive way requires that we deepen our communication with competitors… The industry mindset has evolved to the point where we all recognise that sustainability is something that every company should be pursuing.”
Miki Oikawa, President of POLA Inc
Companies using digital technologies to reach sustainable initiatives
Iberdrola – leading global energy supplier.
Iberdrola set an ambitious goal to ensure at least 70% of its core suppliers have effective sustainable development policies and standards in place, by using appropriate supplier relationship management (SRM) systems. To do this, it migrated to a third party integrated solution to get a detailed view of its environmental impact of its supply chain.
BrightFarms Inc – simplifies and decentralises the supply chain, providing consumers with a more sustainable choice.
It uses blockchain and cloud technologies to ensure the safety of its food in ever-changing climate environments, providing an additional layer of protection. It helps to improve transparency, facilities collaboration and diminish errors in transmission and processing.
“From artificial intelligence to quantum computing, technology is a critical enabler of the systems transformation that we need to ensure a world where more than 9 billion people are all living well and within planetary boundaries, by 2050.”
Peter Bakker, President and CEO of the World Business Council for Sustainable Development (WBCSD)
Key takeaways
- Sustainability requires the right kind of leadership: a transformational one
- Sustainability is and should always be a focus for company strategy
- Investment in digital technology is closely correlated with sustainable transformation
- Innovation, technology and the right team are the ingredients for a successful, transformative approach to achieving sustainable initiatives
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