Closing the green gap – 5 things business leaders can do
As world leaders gather for COP27 in Egypt’s Sharm El-Sheikh this week, the new SAP Wave 2 global sustainability survey built on recent collaborative research with Oxford Economics, found that more than 60 percent of business leaders recognized that sustainability has a moderate or strong effect on their long-term competitiveness and profitability. In addition, customer demand as a sustainability motivator has increased sevenfold in 2022 over the inaugural 2021 survey.
Based on data collected from 6,669 business leaders across 29 industries and 40 countries from regions including the Middle East, the survey found 75 percent of business leaders polled said they would either increase or maintain their current levels of investment. Of those planning to increase investments, 80 percent were intending to boost spending by more than 10 percent.
Sergio Maccotta, Senior Vice President, Middle East South at SAP, commented, “The survey found an impressive shift in the importance afforded to sustainability strategies in terms of both perceived value and investment. For example, almost 90 percent of businesses reported that sustainability informs their business decisions. Moreover, despite persistent global supply chain disruptions, labour shortages, and inflation, the percentage of businesses investing in the environment for the first time has increased fivefold since 2021.”
Despite these and other positive findings, the survey indicated that data quality appears to be a challenge for many businesses. Although respondents in 2022 were more likely to be satisfied with their environmental sustainability data than they were last year, there is still a long way to go. Only 23 percent of businesses are completely satisfied with their data, the rest point to gaps in the sources, quality, and scope of their data as their top dissatisfactions.
Looking to the future, Maccotta said that businesses that are facing challenges or growing pains in their sustainability efforts can seek inspiration from the strategies used by environmental leaders. The Oxford Economics and SAP study found key challenges emerging where companies could focus to improve their sustainability results in order to move into the environmental leaders category. Efforts to address those concerns fall into five core areas:
Begin with executive sponsorship: Sustainability efforts should start with setting an explicit plan that is communicated and emphasized throughout the organization.
Drive clear, consistent communications: While sustainability efforts begin at the top, the vision must be turned into action by employees. Connecting key teams with clear goals is important to push greater sustainability performance.
Integrate processes, technologies and data: Most businesses have not embedded sustainability into their core strategies, leading to disconnected technologies that double count, prevent strategic planning and leave financial and nonfinancial information disconnected. Unifying these assets provides visibility into progress and performance.
Extend sustainable practices to customers, partners and suppliers: Energy providers are a key component of sustainability practices, but more than one third of respondents in the Oxford Economics-SAP study did not view using sustainable energy providers as critical to their carbon-reduction goals (36%). They also did not impose the same requirements on their partners that they put on themselves. Sustainability is a team sport that requires participation across the supply chain.
Understand that data is critical: Capturing and analyzing data provides insight into resources and efficiency. It enables the organization to measure outcomes and raises the flag when improvements are needed. This key component is an area ripe for innovation across industries.