One-off sustainability initiatives and short-term goals just don’t make the cut in today’s ESG-focused market. Consumers now demand greater transparency into business operations, supply chains, and social impacts. Additionally, they’re on the lookout for organizations making investments into the circular economy; that is, the infrastructure dedicated to recycle and reuse.
In fact, a survey found that 66 percent of US consumers believe it is an organization’s responsibility to demonstrate their ESG performance. It’s important to remember that some of these consumers are C-level executives at your customer and prospect companies.
But it’s not just consumers out on the hunt; investors are also insisting on better ESG policies from prospective organizations. Stakeholders want to see detailed plans on how organizations will commit to sustainability initiatives – and more crucially, how they intend to measure and deliver on these.
Also see: Digital Transformation: Definition, Types & Strategy
The Race to Net Zero Has Begun
In the wake of the pandemic, organizations with flexible and transparent ESG strategies have been able to pivot with the changing landscape. However, remaining agile means demonstrating tangible progress, not just written plans. Research suggests that it is essential we achieve net zero emissions by 2050. While many organizations have vowed to make decarbonization a priority, many have yet to take action to reach the net zero goal.
The Race to Zero is a global campaign designed to gain support and action from businesses, leaders, and investors for a zero-carbon economy. This initiative was spotlighted at the UN Climate Change Conference of the Parties (COP26), an event designed to boost real change for sustainability.
Understand What ESG Means to Your Customers
Actions speak louder than words, and it’s up to organizations to prove that they are doing what they’ve stated they will. There is no ESG strategy that will suit all organizations across the board. So businesses need to ensure that their unique sustainability plans not only accommodate what they believe in, but what their customers believe in, too—which can vary from region to region.
Research from GreenBiz highlights the different focus areas each region worldwide associates most with sustainability. For example, in North America, consumers associate sustainability most with recycling. Therefore, investment into the circular economy will be vital to align strategies with local sentiment and ensure the actions of the organization resonate well with the domestic audience.
Also see: Top Digital Transformation Companies
Tech’s Pivotal Role
Waste and pollution reduction, product and material circulation, and nature regeneration are the premise of a circular economy model, and they are difficult to achieve without technological investment.
Climate tech solutions come in many forms, including Application Programming Interfaces (APIs), Internet of Things (IoT), cloud computing, and Software as a Service (SaaS). Investing in these technologies and harnessing their capabilities, such as enhanced product flow and traceability, has enabled organizations to increase waste management control and raise accountability.
As a result, an increasing number of investors recognize the need for climate tech. The market for climate related technology has been thriving; in the first 6 months of 2021, $14.2 billion was invested into climate tech worldwide—this is 88% of the total investments made in 2020, according to research from Pitchbook.
While there are still some businesses who have not yet adopted such a “track, trace, and think” methodology, future-focused companies have already recognized and capitalized on the supply chain traceability, company profitability, and many other benefits that are provided by disruptive technologies and a circular economy.
Everyone on Board – Including the Board
Historically, executives that empower the rest of the organization to be proactive and strategic have enjoyed the most employee engagement and have been the most successful in making an impact when it comes to sustainability. Creating a corporate-level sustainability agenda will keep the whole organization on track to reaching their sustainability goals.
Corporate goals and objectives will be pivotal in establishing an effective ESG strategy, but so will the efforts of everyone else in the business. Incorporating a sustainable culture into the organization – and taking time to celebrate and acknowledge the wins – will ensure everyone is motivated to play their own role in making a difference. Ultimately, to succeed in meeting ESG goals, everyone must be on board to collaborate across their business ecosystem—from stakeholders to customers to partners.
The move toward better sustainability practices is more urgent than ever. That’s why events such as COP26 are pivotal in raising awareness, not only within the hearts and souls of people, but within businesses, nations, and leaders around the world. The time truly is ticking by, yet the transition is doable, and the technology is already there to lend a digital hand to those that wish to pledge their commitment.
Also see: Predicting Cloud Trends for 2022: Migration, Multicloud and ESG
About the Author:
Cindy Jaudon is President of IFS North America