Over the next four years, the EU will deploy carbon tax policies and already investors flock companies with well-documented and data-backed ESG policies and commitments. Companies invest heavily in people and expertise, the number of roles in sustainable development up 91%
in the last five years in UK only. The future of how we do business must be environmentally friendly, and integrated technology solutions will help us make this adjustment.
These signs give me hope, but when it comes to how business and industry approach sustainability, we are only at the beginning. To meet the demands of the market and consumers, each company will have to develop its sustainable development programs so that they are just as precise and rigorous as that of financial accounting. Likewise at The Sarbanes-Oxley Act of 2002
Demands financial record keeping and reporting practices for businesses in the United States, we can expect laws and consumer expectations regarding sustainability impacts to follow suit.
Just as SaaS platforms, cloud computing, and digital transformation have changed the way businesses sell, hire, and invest, we are on the cusp of similar changes in sustainability. For example, as recently as the mid-2000s, interviewing for a new job at the company involved printing resumes, handing out benefits brochures, and signing forms that had been xeroxed. half a dozen times. Today, many HR software companies offer streamlined digital solutions for tracking candidates, onboarding new colleagues, and managing benefits. When large organizations are faced with a high volume of data in any area of their business, digitization is the go-to solution. Businesses have now reached a similar tipping point in their need for sustainability software. With the growing demand to track and prove ESG commitments, digital solutions are now integrated into the fabric of corporate sustainability reporting. Importantly, these solutions will help accelerate progress on climate change.
Over the past decade, I’ve seen first-hand how data-driven sustainability efforts have helped major consumer brands take inventory of their environmental impact, and then make key decisions to transform. their imprint.
- In 2017, Nike set itself the goal of “zero discharge of hazardous chemicals”. This required a coordinated global effort across their supply chain – their network of manufacturers now had to align with wastewater testing and reporting. Nike has used a data platform to track progress in hundreds of installations, and today, they continue to follow adoption of the manufacture of controlled substances.
- In 2018, VF Corp. monitored the basic environmental impact at its factories in China, Bangladesh and Vietnam. Since implementing sustainability programs focused on saving energy, water and greenhouse gases, VF has been able to leverage sustainability data to reduce more than 50,000 metric tonnes of GHGs.
Looking to the future, we can expect sustainability technology to be the next large-scale business investment. Leaders who have led the way like Nike and VF can provide useful lessons for companies just beginning to take a serious look at their environmental impact.
The first lesson is that it is essential to consider your all
impact – holistically. For example, in clothing, the vast majority of a brand’s emissions reside in its supply chain. While efforts to rid retail stores of single-use plastic bags or swap light bulbs in corporate offices are laudable, such initiatives ultimately have marginal impact when all from manufacturing to sales a garment is taken into account. Accurate data must be collected at every step of the supply chain – from the extraction of raw materials to finished products – to get the complete picture. While this is complex in the modern world of disaggregated global production, companies that invest in basic labor today will be able to make the most impactful improvements tomorrow. Only by setting a precise benchmark for water or energy consumption will they be able to track progress and prove the return on investment in sustainability investments.
This brings us to a second lesson: the power of a bottom-up collaborative approach with its supply chain partners. While top-down approaches – for example, using advanced algorithms to estimate carbon emissions based on generalized data sets – are attractive in their ease, this approach will ultimately lack the resolution needed to help. leaders to know if they move the needle. Instead, companies need to take a more granular approach, spanning the entire value chain to collect data from material suppliers to contractors and vendors. While different from the status quo, this is the future of sustainability management. We need to start moving in that direction and leverage digitized enterprise-level solutions to help us get there.
The sustainability leaders of tomorrow will start by implementing the right technological solutions. With huge pools of impact data available, they will need SaaS solutions designed to collect, manage, and contextualize information from many different parts of their business. While there are dozens of robust solutions on the market, it will be important to select platforms and partners that offer scalability, flexibility, reliable data sources, and interoperability with their business systems and their business. existing technology stack.
Sustainability is the next pillar of business software. Until now, few companies believed that rigorously measuring and managing their environmental impact was a major imperative, but with rapidly changing expectations and demands, we will see digitized sustainability solutions become the new normal, especially for manufacturers of consumer goods.