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13 Jun 2022

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Many sustainability initiatives fail despite good intentions

Companies face significant barriers to implementing sustainability initiatives. Among the issues are a lack of communication and engagement from executives, ineffective use of data, silo technologies that do not share processes or information, and a lack of collaboration and partnership between companies and industries.

A survey by Oxford Economics among SAP customers shows that while the value of sustainability initiatives is not widely recognised, their business benefits are well understood. Generally, executives are keen to make their organizations more sustainable, citing efficiency (58%), improving brand reputation (46%), and meeting customer needs (44%). Sixty-three percent of the executives surveyed said their company already has a sustainability plan.

"Executives recognize that sustainability efforts can improve profitability, attract both customers and employees, and positively impact their supply chains,” said Vivek Bapat, senior vice president of Purpose and Sustainability, SAP. “But achieving these goals requires a high level of communication and engagement. At SAP, we are trying to understand how we can support these companies in realizing their sustainability goals and defining best practices across all industries.”

There is a lack of internal and external connections at most organizations that participated in the survey. The vast majority of executives who do have sustainability plans feel that the plans are not effectively communicated within the organization or to the outside world.

There is, however, a small group of executives - about 9% - who have embraced and are reaping the benefits of sustainability-focused processes. These "sustainability leaders" are defined by characteristics such as setting clear expectations at a strategic level, integrating technology and data management, and communicating with key audiences, such as employees, supply chain partners and policy makers.

Sustainability leaders are delivering on sustainability initiatives, says Edward Cone of Oxford Economics. “They communicate with key stakeholders inside and outside the company and use integrated technologies to measure performance in a way that drives accountability.”

The study provides comprehensive information about companies' sustainability efforts. In order to improve sustainability results and become leaders, companies need to focus on the key challenges outlined in the answers. In order to address these issues, five key areas need to be addressed: corporate sponsorship, consistent communication, integration of processes, technology, and data, collaboration with partners and suppliers, and a better understanding of data value.

Sustainability efforts should begin with an explicit plan that is communicated and emphasized throughout the organization. While sustainability efforts start at the top, employees must take action to make the vision a reality. To improve sustainability performance, key teams need to be connected with clear goals. Most companies do not integrate sustainability into their core strategies. The result is decoupled technologies that hinder strategic planning and separate financial and non-financial information. Bringing these resources together provides insight into progress and accomplishments.

The use of sustainable energy suppliers is an important part of sustainability measures, but 36% of respondents do not consider the use of sustainable energy suppliers essential to their CO2 reduction goals. Neither do they demand the same from their partners as they do from themselves.

Insights into resources and efficiency can be gained from capturing and analyzing data. It enables the organization to measure the results and alerts if improvements are needed. In all industries, this key area is ripe for innovation, concludes the survey.

Photo credit: Anders J

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