Climate change is increasingly becoming more and more impacting with the potential to create a socio-economic divide never seen before. The recent scientific report from the UN’s Intergovernmental Panel on Climate Change made it very clear that human activity is changing the climate in unprecedented and irreversible ways. We are not short of evidence that we are, indeed, heading for a catastrophe. The amount of carbon dioxide in the earth’s atmosphere is at the highest level in over four million years. 2020 was the joint warmest year globally, and the last six years were the warmest on record. In another seven years, global warming could be irreversible. Thus, we have very little time to act, writes, Dr Lovneesh Chanana, Vice PresidentGovernment Affairs, Asia Pacific & Japan, SAP.
At the organisational level, the stakeholder expectations are already demanding the CEOs to act on sustainability. From a consumer perspective, there is 5.6 times faster growth of sustainable consumer packaged goods. An estimated $90 trillion of investment for climate-smart infrastructure is required by 2030. Responsible employers are the top priority amongst job-seeking millennials and Gen-Z. A 34 per cent increase in global sustainable investment was observed between 2016 and 2018. Sustainable businesses today have the advantage of increased customer loyalty, access to capital, the reputation of responsibility, and employee engagement. The issue of making sustainability profitable and profitability sustainable is now interlinked.
Sustainability in governance is indeed becoming a top management issue. The various parts of the organisation are required to embed sustainability into the end-to-end processes. Sales need to reorient to the shifting consumer preferences for ‘green products’ while mentioning sustainability to the portfolio and messaging. HR needs to demonstrate responsibility as a caring company to attract best-in-class employees. Manufacturing needs to comply to supply chain laws, carbon tax rules and vendor certification. Finance must ensure compliance with new rules and regulations for financial governance and taxes.
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The primary requirement from the stakeholder is to infuse sustainability into the core of the business. While regulatory compliance can be aided by data and supply chain transparency, the seamless integration of established processes to convert insights into action can help drive sustainability into the business core. Sustainability also offers the potential for innovation and growth with new business models and value propositions.
The world today needs to move to zero emissions, zero waste, and zero inequality:
● Zero emissions – through climate action to manage environmental footprint including compliance, regulations, and carbon-trading.
● Zero waste – through the circular economy by redefining design, production, demand, and supply of products through their use cycles for reusability, waste reduction, and new value creation.
● Zero inequality – through social responsibility across the workforce, sourcing, and procurement to enable equality and social fairness.
But the question is how? Sustainability is essentially a resource management issue. Companies are looking to issue. Companies are looking to reduce GHG emissions, reduce waste, increase circularity, and use socially responsible business practices. The key requirements are access to comprehensive data insights and business process activation. Sustainability is a journey and not a destination. The success is directly dependant on data transparency and process action working together. The way forward, therefore, is to embed sustainability insights into end-to-end industry-specific business processes. This can help companies gain key financial insights into their carbon footprints, material flows, and diversity and inclusion initiatives. That way, we can optimise carbon emissions, increase operational efficiency by activating circular business processes and connect with socially responsible partners across the network.
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The balancing of the bottom line with green line objectives can be facilitated by embedding sustainability metrics into the business process. Technology can help address all relevant areas of carbon footprint accounting, environment, health and safety, circular economy, supply chain, and product compliance, environment social and Governance reporting, and zero-waste management to provide end-to-end sustainability. Technology companies, therefore, have the dual role of being an exemplar as well as an enabler. For example, like SAP, we work both as an enabler and an exemplar.
Let’s work together to create a technology-enabled world with zero emissions, zero waste and zero inequality