Sustainability and business: lost in translation?
As a new global survey of 200 businesses conducted by Omdia, IoT World Today, and AI Business shows, this interest in sustainability crosses both regions and company size. However, while sustainability has become a recognized business imperative, the survey suggests that the path from messaging and awareness to implementation and measuring real-world impact is more difficult to chart. Talking about sustainability appears to be one thing; creating policies and bringing those plans to life is another thing, at least for now.
The first step in evaluating how best to adopt and track sustainability best practices for businesses is simply to define a coherent framework. When it comes to shaping sustainability strategies, the survey found that across the globe, businesses are most familiar with and rely on the United Nation’s Sustainable Development Goals (SDG). Indeed, 71% of those surveyed said they were aware of the SDG framework, which was published in 2015 and includes 17 key categories. Although US respondents were familiar with the SDG framework, an even higher proportion were aware of the Dow Jones Sustainability Index.
Reasons to adopt a sustainability strategy
As revealed by the recent survey, the drivers for sustainability in business point toward dual internal and external pressures. The top reason for adopting sustainability policies was to help reduce company costs (33%). But this internal rationale was followed closely by the perception that sustainability is an initiative expected by customers (32%). The third most often cited reason for formalizing a sustainability program was to help propel company growth (28%). For those early adopters, sustainability practices offer the best of both worlds: they can help a company’s bottom line and reputation, its internal operations as well as its external standing.
Digging deeper to examine the attitudes of vendors and enterprises separately shows an interesting nuance. The top two reasons for enterprise respondents to adopt sustainability policies were cost reduction plus fulfilling regulatory compliance. For vendors, however, the top driver is to meet customer expectations. From that perspective, it seems enterprises could be putting new sustainability pressures on vendors. Viewed one way, this could potentially be helping to create a top-down cascade effect that grows sustainability practices; less generously, it is perhaps worth interrogating if enterprises are looking to outsource sustainability needs and practices to vendors.
Current state and comparisons
Perhaps as a consequence of feeling more pressure from their enterprise clients, vendors remain ahead when comparing rates of full or in-progress implementation of sustainability policies. As shown in the table below, this lagging behind is even starker when comparing large enterprises (more than 2,500 employees) to smaller enterprises (fewer than 2,500 employees). For sustainability to continue to gain momentum, it appears small enterprises could use help catching up and growing their programs.
While progress is clearly being made, it’s not all positive news. Fewer than a quarter of respondents overall (24%) have sustainability policies implemented with a well-defined strategy that also ladders to the company’s broader strategy. This disconnect is even more notable when considering that 84% of respondents say their business and sustainability goals are interlinked. As another indication that theory and practice, commitment and action are potentially mismatched, consider that 41% of respondents do not consider or require sustainability commitments.
Younger employees appear to be especially attuned to this breakdown between talk and action. Those under 40, for instance, are more likely than their older colleagues to be disappointed in their company’s current progress (37% vs. 23%).
Where impact is most felt, seen, and expected
For those part of a company that has already implemented sustainability policies, the most notable impact has been on energy and water conservation, with 91% of respondents citing improvement in these areas. Conservation is perhaps not surprising as an early proof point for a business’s sustainability forays: it is easy to measure water and energy use, and both have drawn even more scrutiny during this difficult economic climate. Beyond energy and water conservation, a similarly high proportion (76%) of respondents believe that sustainability practices have had a positive impact on revenue and cost pressures.
Interestingly, the recent survey suggests that a company’s sustainability policies could even have an impact on the talent it attracts. An impressive 64% of respondents noted that a potential employer’s sustainability efforts would be important or very important to consider when applying to or considering a job offer. The results are even more noteworthy when broken down by region, with 76% of those in EMEA compared to 51% of those from North America pointing toward sustainability efforts as important or very important to consider from a potential employer. Age differences also reveal a shift in attitudes, with 44% of respondents under 40 years of age considering an employer’s sustainability practices very important compared to only 28% of those over 50 years old believing the same.
Blockers and technological triggers
When it comes to current blockers standing in the way of sustainability efforts, respondents were most likely to point to lack of budget (40%) and difficulties identifying technologies that will have a positive impact (33%). There is, however, optimism when looking forward at the role technology can play in advancing sustainability. AI, IoT, and data analytics were frequently cited as catalysts that will help companies move toward meeting Goal 9 of the UN’s SDG (Goal 9: “build resilient infrastructure, remote inclusive and sustainable industrialization and foster innovation”). Indeed, Industrial IoT (38%) and advanced data analytics (37%) were the top two technologies cited as likely to have the largest impact on sustainability over the next 18 months.
The survey results show a clear groundswell of interest in sustainability as a topic that businesses should participate in and benefit from. But translating interest and awareness into concrete policies and clearly defined strategies appears to be proving more elusive, especially for small-sized enterprises. That doesn’t necessarily mean trouble for the future of sustainability practices and business. But it does suggest that we are still in the early stages of seeing sustainability integrated seamlessly into businesses, with future growth and benefits most likely to fall to those companies that can best (pardon the pun) sustain effort, attention, and resources in this still developing landscape.
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