Companies searching for to speed up sustainability initiatives should take an built-in method that brings collectively all enterprise and expertise features. Sustainability is now not the duty of solely the chief sustainability officer (CSO). It’s not managed by a single division in a silo. Driving true sustainable affect, at scale, takes place when an enterprise is absolutely aligned to that transformation. To scale progress in combating local weather change, this alignment and collaboration should occur throughout worth chain companions, ecosystems, and industries.
Sustainability and ESG: A possibility for synergy
Sustainability and ESG should not synonymous. Whereas ESG seeks to supply commonplace strategies and approaches to measuring throughout environmental, social and governance KPIs, and holds organizations accountable for that efficiency, sustainability is much broader. ESG can function a car to progress sustainability however it may well additionally distract from the pressing want of combating local weather change and dealing towards the 17 UN SDGs.
As we’ve got seen with any type of exterior reporting liabilities, the sort of accountability does drive motion. It’s our duty to make sure we don’t simply do ESG reporting for the sake of reporting, and that it doesn’t impede precise progress in sustainability. We should guarantee ESG progress and sustainability are driving in the direction of a typical aim. The fact is firms may be able to fund ESG initiatives, however not as able to fund ‘sustainability’ initiatives.
If designed deliberately, these don’t have to be separate initiatives. When one thing is ‘regulatory,’ ‘necessary,’ or ‘involuntary,’ firms haven’t any alternative however to discover a approach. A pre-existing sustainability workplace might discover assets or funds shifted to ESG, or a reprioritization of targets primarily based on ESG measurements. Nevertheless, to seize each the enterprise worth behind ESG compliance in addition to its potential to drive affect, it requires a holistic method that strategically captures these synergies.
We’re serving to our purchasers maximize these investments, leveraging the necessities of ESG to drive compliance in addition to sustainability. Our purchasers are enhancing their potential to measure and observe progress in opposition to ESG metrics, whereas concurrently operationalizing sustainability transformation.
Maximizing worth with a holistic technique
Step one in maximizing that twin worth is upfront due diligence. It’s essential to assess the present state of reporting readiness, the alignment between ESG necessities and voluntary sustainability initiatives, and any consideration on easy methods to drive acceleration with future-proofed options. Questions would possibly embody:
- The place is the group relative to its required and voluntary sustainability objectives?
- Have the sustainability objectives developed in response to latest regulation or market shifts?
- How aligned is the sustainability technique to the enterprise technique?
- Is possession of delivering sustainability objectives distributed all through the group or is each chief conscious of how they’re anticipated to contribute?
- How is sustainability managed—as an annual measuring train or an ongoing effort that helps enterprise transformation?
- What rules are owned by particular practical areas which will contribute to a broader ESG roadmap if seen holistically?
- Are there in flight enterprise or expertise initiatives the place I can embed these necessities?
Up till lately, sustainability was probably dealt with by one central group. Now, practical areas throughout the group are recognizing their position in measuring ESG progress in addition to their alternatives to assist make their firm extra sustainable.
Just like an organization executing any company technique, progress is made when the group understands it, and workers are conscious of how they play a task in bringing it to life. All leaders should allow groups and departments to know how sustainability is a part of the company technique. They have to present the enablement and instruments so these groups can combine the overarching sustainability goal and aims throughout the company technique into their respective roles in accelerating sustainable outcomes.
I see a transparent shift in firms turning into extra conscious that they have to work throughout departments to drive sustainability. An organization can not report on scope 3 category 7 of employee commute with out worker information from HR or services administration information, or with out the expertise platform and information governance to have an auditable view of that information. Companies can not show there isn’t any pressured labor of their provide chain with out working with procurement to know their provider base, the place they’re situated, and what may be excessive danger, after which resolution to embed proactive danger administration in vendor onboarding.
Embedding sustainability in observe
Accountability is the place an enterprise can be certain that sustainability is embedded and activated. The thought of embedding is integrating it into the day-to-day position. It’s enabling workers to make knowledgeable choices and understanding the local weather affect primarily based on that call. Any enterprise or funding determination has a revenue lever, a price lever, and typically a efficiency lever, corresponding to an Service Stage Settlement (SLA). Now, sustainability could be a lever to really embed affect into on a regular basis operations. Staff could make extra sustainable choices figuring out the tradeoff and affect.
A latest examine from the IBM Institute for Business Value surveyed 5,000 world C-suite executives throughout 22 industries to seek out out why sustainability isn’t producing extra affect for organizations. The examine discovered firms have been simply “doing sustainability,” or approaching sustainability as a compliance process or accounting train fairly than a enterprise transformation accelerator.
Executives acknowledge the significance of knowledge to realize sustainability aims; 82% of the examine’s respondents agree that high-quality information and transparency are essential to succeed. Nevertheless, a constant problem they encounter in driving each ESG reporting and sustainable transformation is the shared actuality is that firms can not handle what they can not measure.
Knowledge not solely supplies the quantitative necessities for ESG metrics, it additionally supplies the visibility to handle the efficiency of these metrics. If the staff of an organization don’t have the information, they can not publish monetary grade reporting, determine alternatives for decarbonization, or validate progress in the direction of turning into a extra sustainable firm.
One level addressed in our examine surrounds the information particular challenges that may include sustainability. Findings revealed that “regardless of recognizing the hyperlink between information and sustainability success, solely 4 in 10 organizations can routinely supply sustainability information from core techniques corresponding to ERP, enterprise asset management, CRM, energy management, and facilities management.”
When purchasers embed the appropriate processes and organizational accountability throughout ESG reporting and sustainability, they will make certain they’re getting the appropriate data and information into the arms of the appropriate individuals, usually system house owners. These ‘proper individuals’ can now make extra knowledgeable choices of their respective roles and scale transformation from one group to the whole group whereas additionally incorporating these wants of ESG information seize, assortment, and ingestion for the sake of each reporting and operationalizing.
The examine discovered organizations that efficiently embedded sustainability approached the information usability problem by way of a firmer information basis and higher data governance. The criticality of a transparent information technique and basis brings us to our last matter: how generative AI can additional speed up sustainability.
Using generative AI to embed sustainability
There are various completely different functions for generative AI on the subject of embedding sustainability, particularly on the subject of filling in information gaps. The information wanted for ESG and sustainability reporting is immense and complicated. Oftentimes, firms don’t have it obtainable or have the right protocols to align their information and sustainability methods.
Most purchasers, whatever the measurement of the corporate, have sustainability groups which are stretched, attempting to manually chase information as a substitute of specializing in what the information is saying. Generative AI can unlock productiveness potential, accelerating information assortment and ingestion reconciliation. For instance, as a substitute of sustainability groups manually amassing and reviewing paper gas receipts, expertise may help translate receipt photos into the mandatory information parts for fuel-related metrics. This enables these groups to spend extra time on easy methods to optimize gas use for decarbonization, utilizing time for information insights as a substitute of time chasing the information.
By spending all of your time on reconciling invoices or amassing bodily gas receipts, how are you or others in your group going to have the time to know the information and in flip make adjustments to drive sustainability? If time is spent amassing information after which pulling collectively stories, there’s little time left to garner actionable insights from that information and enact change. Methods and processes have to be in place in order that a corporation can drive sustainability efficiency, whereas assembly ESG reporting necessities, and never use all of its assets and funding on information administration that gives eventual visibility with out the capability to make use of it for affect.
As talked about within the examine, generative AI could be a “sport changer for data-driven sustainability, enabling organizations to show trade-offs into win-wins, determine enchancment alternatives, and drive innovation at pace and scale.” It’s little surprise why 73% of surveyed executives say they plan to extend their funding in generative AI for sustainability.
To really leverage the ability of generative AI tomorrow, firms should first perceive their information readiness right now. Then, we are able to prioritize how generative AI can enhance current information for visibility and use that information for efficiency insights.
Firms can determine speedy alternatives for generative AI to assist them transfer sooner, whereas concurrently making certain that the core information assortment and administration is established to assist present and future reporting wants. We would like our purchasers to concentrate on leveraging ESG reporting to have a return on funding (ROI) financially, in addition to in driving sustainable affect. Whereas exterior necessary necessities will probably be a driver for the place a corporation’s funds is allotted, organizations can deliberately embed sustainability as part of these initiatives to seize the total worth of their transformation efforts.
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