Companies searching for to speed up sustainability initiatives should take an built-in method that brings collectively all enterprise and know-how capabilities. Sustainability is not the accountability of solely the chief sustainability officer (CSO). It isn’t managed by a single division in a silo. Driving true sustainable affect, at scale, takes place when an enterprise is totally 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 will not be synonymous. Whereas ESG seeks to supply customary 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 could additionally distract from the pressing want of combating local weather change and dealing towards the 17 UN SDGs.
As we’ve seen with any form of exterior reporting liabilities, this sort of accountability does drive motion. It’s our accountability 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 direction of a typical objective. The truth is corporations could be able to fund ESG initiatives, however not as able to fund ‘sustainability’ initiatives.
If designed deliberately, these wouldn’t have to be separate initiatives. When one thing is ‘regulatory,’ ‘necessary,’ or ‘involuntary,’ corporations don’t have 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. Nonetheless, to seize each the enterprise worth behind ESG compliance in addition to its capability to drive affect, it requires a holistic method that strategically captures these synergies.
We’re serving to our shoppers maximize these investments, leveraging the necessities of ESG to drive compliance in addition to sustainability. Our shoppers are bettering their capability to measure and observe progress towards 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 how you can drive acceleration with future-proofed options. Questions would possibly embrace:
- The place is the group relative to its required and voluntary sustainability targets?
- Have the sustainability targets developed in response to current regulation or market shifts?
- How aligned is the sustainability technique to the enterprise technique?
- Is possession of delivering sustainability targets 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 that will contribute to a broader ESG roadmap if considered holistically?
- Are there in flight enterprise or know-how initiatives the place I can embed these necessities?
Up till not too long ago, sustainability was almost definitely dealt with by one central workforce. 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.
Much like an organization executing any company technique, progress is made when the group understands it, and staff are conscious of how they play a task in bringing it to life. All leaders should allow groups and departments to grasp how sustainability is a part of the company technique. They need to present the enablement and instruments so these groups can combine the overarching sustainability function and aims throughout the company technique into their respective roles in accelerating sustainable outcomes.
I see a transparent shift in corporations turning into extra conscious that they have to work throughout departments to drive sustainability. An organization can’t report on scope 3 category 7 of employee commute with out worker knowledge from HR or amenities administration knowledge, or with out the know-how platform and knowledge governance to have an auditable view of that knowledge. Companies can’t show there is no such thing as a compelled labor of their provide chain with out working with procurement to grasp their provider base, the place they’re positioned, and what could be excessive danger, after which answer to embed proactive danger administration in vendor onboarding.
Embedding sustainability in apply
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 staff to make knowledgeable selections and understanding the local weather affect primarily based on that call. Any enterprise or funding determination has a revenue lever, a value lever, and typically a efficiency lever, equivalent to an Service Degree Settlement (SLA). Now, sustainability generally is a lever to actually embed affect into on a regular basis operations. Workers could make extra sustainable selections figuring out the tradeoff and affect.
A current examine from the IBM Institute for Business Value surveyed 5,000 international C-suite executives throughout 22 industries to search out out why sustainability isn’t producing extra affect for organizations. The examine discovered corporations had been simply “doing sustainability,” or approaching sustainability as a compliance activity or accounting train quite than a enterprise transformation accelerator.
Executives acknowledge the significance of information to attain sustainability aims; 82% of the examine’s respondents agree that high-quality knowledge and transparency are essential to succeed. Nonetheless, a constant problem they encounter in driving each ESG reporting and sustainable transformation is the shared actuality is that corporations can’t handle what they can’t measure.
Knowledge not solely offers the quantitative necessities for ESG metrics, it additionally offers the visibility to handle the efficiency of these metrics. If the staff of an organization don’t have the information, they can’t publish monetary grade reporting, determine alternatives for decarbonization, or validate progress in 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 knowledge and sustainability success, solely 4 in 10 organizations can mechanically supply sustainability knowledge from core programs equivalent to ERP, enterprise asset management, CRM, energy management, and facilities management.”
When shoppers embed the correct processes and organizational accountability throughout ESG reporting and sustainability, they’ll be certain that they’re getting the correct info and knowledge into the palms of the correct folks, usually system homeowners. These ‘proper folks’ can now make extra knowledgeable selections of their respective roles and scale transformation from one workforce to your complete group whereas additionally incorporating these wants of ESG knowledge 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 via a firmer knowledge basis and higher data governance. The criticality of a transparent knowledge technique and basis brings us to our closing matter: how generative AI can additional speed up sustainability.
Using generative AI to embed sustainability
There are numerous completely different purposes for generative AI on the subject of embedding sustainability, particularly on the subject of filling in knowledge gaps. The information wanted for ESG and sustainability reporting is immense and complicated. Oftentimes, corporations don’t have it obtainable or have the proper protocols to align their knowledge and sustainability methods.
Most shoppers, whatever the dimension of the corporate, have sustainability groups which might be stretched, attempting to manually chase knowledge as a substitute of specializing in what the information is saying. Generative AI can unlock productiveness potential, accelerating knowledge assortment and ingestion reconciliation. For example, as a substitute of sustainability groups manually gathering and reviewing paper gas receipts, know-how might help translate receipt pictures into the mandatory knowledge parts for fuel-related metrics. This enables these groups to spend extra time on how you can optimize gas use for decarbonization, utilizing time for knowledge insights as a substitute of time chasing the information.
By spending all of your time on reconciling invoices or gathering bodily gas receipts, how are you or others in your group going to have the time to grasp the information and in flip make adjustments to drive sustainability? If time is spent gathering knowledge after which pulling collectively studies, there’s little time left to garner actionable insights from that knowledge and enact change. Techniques and processes should 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 knowledge administration that gives eventual visibility with out the capability to make use of it for affect.
As talked about within the examine, generative AI generally is a “recreation 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, corporations should first perceive their knowledge readiness as we speak. Then, we will prioritize how generative AI can enhance current knowledge for visibility and use that knowledge for efficiency insights.
Firms can determine quick alternatives for generative AI to assist them transfer quicker, whereas concurrently making certain that the core knowledge assortment and administration is established to assist present and future reporting wants. We wish our shoppers to deal with leveraging ESG reporting to have a return on funding (ROI) financially, in addition to in driving sustainable affect. Whereas exterior necessary necessities might 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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