Why Sustainability Is the Next Priority for Enterprise Software

Over the next four years, the EU will roll out carbon tax policies and investors are already flocking to companies that have well-documented, data-backed ESG policies and commitments. Companies are making significant investments in staff and experience, with the number of roles in sustainability increasing by 91% over the past five years in the UK alone. The future of how we do business must be environmentally sustainable, and integrated technology solutions will help us make that adjustment.

These signs give me hope – but when it comes to how companies and the industry are approaching sustainability, we’re still only at the beginning. To meet the demands of the market and consumers, each organization will need to develop its own sustainability software to be as accurate and rigorous as the financial accounting software. Similar to the Sarbanes-Oxley Act of 2002 mandating financial record-keeping and reporting practices for companies in the United States, we can expect laws and consumer expectations about sustainability impacts to follow suit.

In the same way that SaaS platforms, cloud computing, and digital transformation have changed how organizations are sold, hired and invested, we are on the cusp of similar changes within sustainability. For example, as recently as the mid-2000s, interviewing for a new job at the company meant printing resumes, distributing paper benefit brochures, and signing forms that were Xeroxed six times. Today, many HR software companies offer streamlined digital solutions to track candidates, prepare new colleagues, and manage benefits. When large organizations are faced with a large volume of data in any area of ​​their business, digitization is the inevitable solution. Companies have reached a similar tipping point in their need for sustainability programs today. With the growing demand for tracking and proving ESG commitments, digital solutions are now being integrated into the fabric of enterprise sustainability reporting. Most importantly, these solutions will help scale advances in climate change.

Over the past decade, I’ve seen firsthand how data sustainability efforts first helped major consumer brands take an inventory of their environmental impact and then make key decisions to transform their footprint.

  • In 2017, Nike set a “no-discharge of hazardous chemicals” goal. This required a coordinated global effort across their supply chain – their network of manufacturers had to now align with wastewater testing and reporting. Nike used a data platform to track progress across hundreds of facilities, and today, they continue to track the uptake of banned substances.
  • In 2018, VF Corp tracked the primary environmental impact across 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 tons of greenhouse gases.

Looking to the future, we can expect sustainability technology to be the next large-scale investment for enterprises. Paving the way leaders like Nike and VF can provide useful lessons for companies that are just beginning to take a serious look at their environmental impact.

The first lesson is that it is necessary to take into account complete
Effect – holistically. For example, in clothing, the vast majority of a brand’s emissions lie in its supply chain. While efforts to rid retail stores of single-use plastic bags or replace light bulbs in corporate offices are commendable, such initiatives ultimately have a marginal impact when the sale of an item of clothing is taken into account. It takes accurate data collection at every step of the supply chain – from raw material extraction to finished goods – to get the full picture. While this is complicated in the modern world of global classified production, companies that invest in foundation work today will be able to make the most impactful improvements tomorrow. Only by establishing an accurate baseline for water or energy use will they be able to track progress and demonstrate a return on investment on sustainability investments.

This brings us to a second lesson: the power of a bottom-up collaborative approach with supply chain partners. While top-down methods—for example, using advanced algorithms to estimate carbon emissions based on generalized data sets—are attractive in their ease of use, this approach will ultimately lack the nuance needed to help leaders know if they are moving the needle. Instead, companies must take a more nuanced approach, accessing across the value chain to collect data from material suppliers to contractors and suppliers. While different from the status quo, this is the future of sustainability management. We have to start moving in that direction and taking advantage of enterprise-wide digital solutions to help us get there.

Tomorrow’s sustainability leaders will start implementing the right technology solutions. With massive sets of impact data available, they will need SaaS solutions designed to gather, manage, and contextualize information from different parts of their business. While there are dozens of robust solutions on the market, it will be important to choose platforms and partners that offer scale, flexibility, reliable data sources, and interoperability with existing business systems and their technology suite.

Sustainability is the next pillar of the Foundation’s programmes. So far, few companies have felt that rigorously measuring and managing their environmental impact was imperative – but with rapidly evolving expectations and demands, we will see digital sustainability solutions become the new normal, particularly for FMCG manufacturers.

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