Data is arguably the most important tool for driving sustainability efforts in all industries. Data on energy, water, waste, and ethical workforce practices are invaluable in enabling organizations to work more intelligently, sustainably, and efficiently both internally and at the level of their supply chains.
In a recent SAP Insights survey, business professionals who were knowledgeable about their companies' sustainability goals said that most organizations are taking at least some steps in the direction of greater environmental sustainability. Furthermore, organizations that put more effort into the environmental goal expect to see better company performance in general. However, all survey respondents cited data-related uncertainties as the most significant barriers to acting on sustainability.
The nows, imminents and laters
According to the SAP survey, 17% of respondents are already finding that matters of environmental sustainability are financially important. SAP calls these the 'Material Nows’. The Nows have more committed leaders who see the need for immediate change and drive plans to incorporate sustainability into their business operations.
They state that the main reason for their company to become more sustainable is because their CEO and Board are driving an ESG agenda. Other motivations include government regulations, the company's commitment to United Nations Sustainable Development Goals, and the opportunities that sustainability can bring to the bottom line.
Amongst the remaining 83% of those surveyed, 22% think sustainability will be important to their business within five years. These people, who SAP calls the ‘Imminents’, state they are more likely to take action on sustainability issues and see higher performance gains than the remaining 61% of respondents, which SAP dubs the ‘Laters’.
Data is a valuable tool to plan for a more sustainable future
The Nows say they're more satisfied with the quality of data on environmental sustainability. The Imminents and the Laters are more likely to experience issues with data quality and aren’t confident that their data is updated regularly or covers the required scope.
The increased confidence in their data could be because the Nows have a larger and deeper database from which to derive insights that can help them achieve more useful and predictable results. 44% of them have been collecting relevant data for five years or more, compared to 34% of the Laters and 20% of the Imminents.
The Now respondents report that their companies have more data about the environmental impacts of their business than the other groups. They also use it as a valuable tool to plan better for a more sustainable future.
For example, many consumer products from Miami to Mumbai are packaged the same way, no matter where they’re sold. But environmentally motivated legislation can change that, with the result that packaging design can generate different costs and benefits depending on where it’s used.
Good quality data can help a company discover how different packaging might impact its financial future. Maybe they'll learn that they could get new customers, lower costs, or meet environmental regulations in a new way. Whatever it is, with good data and the right analysis tools they can predict the best time, in terms of cost efficiencies, to make changes instead of waiting for regulation to force the change.
Acting now for a sustainable future
Given the fact that there is so much awareness of the dangers of environmental problems, such as climate change and resource scarcity, it’s surprising (and quite concerning) to see that 61% of survey respondents believe sustainability will have no impact on their business in five years or more.
However, the data shows that sustainability is a major strategic and operational challenge for all respondents. Perhaps the Laters are waiting until carbon taxes, supply chain regulations, and other legal requirements start to affect their bottom line years from now.
When respondents think environmental factors already affect their company's performance, or will in the future, they're more likely to use that data to inform decision-making. The Nows recognize that a company's future is inevitably linked to the future of the planet. They're transforming their organizations, and achieving better business results than the other 83% of those interviewed in the survey.
People at the Now level are already committed to making a change for the better. They are becoming sustainable, intelligent enterprises and are more likely to apply their environmental sustainability data to their business decisions. The company leaders who make up this group also emphasize long-term profit, so they've decided to embrace sustainability today and take action for the future of their business.
SAP Sustainability Control Tower
Seeing as SAP systems are involved in nearly 90% of the world's finance and goods, most ESG (Environmental, Social and Governance) data already resides in SAP ERP and related apps.
SAP Sustainability Control Tower can be a vital tool in using this data to measure and manage a company's 'green line'. It offers a flexible open architecture, powerful integration and scalability, and support from a broad range of partners. The solution works in tandem with the sustainability solutions within SAP Cloud for Sustainable Enterprises, which add additional features such as carbon emissions management, waste and materials management for circularity, and people sustainability.
The journey from traditional thinking to sustainable business practices is a long one, but the challenge is becoming more urgent every day. Currently, the SAP partners within the United VARs global alliance report that companies are asking about sustainability solutions for different stages of their transformation.
Some are looking for quick results to conform to rapidly changing regulations; others want to optimize their ESG data management and performance to satisfy their shareholders and customers. Regardless of which phase they're in, the shift from traditional business practices to sustainability will require ongoing commitment and digital transformation.
Corporate sustainability is already a significant issue, even if it's not always reflected in the balance sheet. Putting it at the heart of an organization will benefit both the planet and the business. In our opinion, this will happen far quicker than most companies currently think.
Many of our United VARs members, all of whom are amongst the top SAP Partners in their countries, can help you to use SAP technologies (such as SAP Sustainability Control Tower) to record, report and act on your sustainability goals. For more information, contact your local United VARs member.
About United VARs
United VARs is a global alliance of SAP implementation partners and solution providers for the mid-market. With over 70 members in 100 countries, the alliance serves all types of SAP rollouts and integrations across the world. The organization provides businesses with local expertise ‘on the ground’ charged at local rates. All United VARs members work together as one team to provide a more personalized service than other global systems integrators are able to, and one that is better suited to mid-market budgets.
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